Maximize Home Health Savings with On-Demand Outpatient Therapy

By Luna
Maximize Home Health Savings with On-Demand Outpatient Therapy

Maximize Home Health Savings With On-Demand Outpatient Therapy

Health systems now have two ways to help patients recover from surgery without the need to travel to a clinic: traditional home health and on-demand outpatient therapy. 

Receiving traditional home health care makes sense for some patients that need to recover at home, but not always needed for everyone that receives it. This results in over-utilization of home health services and unnecessary costs. 

At one health system we studied, 14,000 patients received home health but only 10,000 patients actually needed it.1 This is not uncommon.  Many health systems struggle with home health over-utilization, as it is a convenient way to refer a post-surgical patient to outpatients, even though it’s more expensive.

An exciting alternative to home health blends the benefits of at-home care with cost-saving efficiencies. On-demand outpatient therapy, delivered in-person to the home, is poised to transform how patients, payers, and providers think about post-acute care.

On-Demand Outpatient Therapy Explained

Luna finds that around 25%-30% of all home health visits only require therapy, no medical or nursing care is needed. This is true of the millions of patients who undergo joint replacement surgery each year.

With on-demand outpatient therapy, a qualified therapist travels to the patient’s home, office, or gym, and does 45-55 minutes of one-on-one care with a patient. It’s exactly what the patient needs to recover without unnecessary services, unlike home health which tends to utilize as many resources as possible (nursing, wound care, nutrition assistance, etc) even if they are unnecessary after a joint replacement. 

When a health system offers on-demand outpatient therapy, a patient receives a referral after surgery. The patient can book the first appointment within 48 hours in most cases, and instead of traveling to a clinic for care, the therapist comes to the home. It is a more convenient way for patients to access therapy, and a more economical way for providers to deliver it. And exactly what the doctor ordered, the ability for patients to start therapy as soon as possible following discharge. 

Breaking Down the Numbers for On-Demand Delivery

Compared to home health, on-demand delivery cuts costs by 70% and saves a health system around $2,900 per patient case.

In one instance,1 on-demand delivery saved a relatively small health system close to $1 million in a year. The health system performed 325 total joint replacements, which require physical therapy post surgery. The savings of using on-demand outpatient therapy for each patient work out like this: 

325 patients per annum x $2,900 savings per case = $942,500 total savings per annum.

Those savings go 100% back into a health system’s pocket when they participate in a Medicare bundled arrangement. Since these arrangements pay a set amount for post-acute care, health systems that lower what they spend delivering that care directly benefit from the savings. It adds up fast, and even a few thousand patients can be millions of savings. 

Just as significant is the effect that on-demand delivery has on patient satisfaction. Consider a 2019 survey showing that people value convenience in healthcare even more than quality. Receiving healthcare at home – whether through on-demand delivery, telemedicine, or other means – appeals to many right now, especially in the time of COVID-19. Patients will increasingly seek out and stick with the providers that make healthcare flexible and accessible, which is exactly what on-demand delivery accomplishes.

What else could a new approach to outpatient therapy – one enabled by a turn-key solution from Luna – do for your health system? Discover how broad and deep the impacts go in this whitepaper.

1 Luna Rehab Referral Leakage and Home Health Cost Exposures analysis, 2021.

2 Article Convenience more important to patients than quality of care, survey finds.