Wondering how to diversify? Take your pick

You don’t have to be all things to all people

If recent trends continue, it should be clear that providing strictly plain-vanilla home infusion services doesn’t cut the mustard if your agency hopes to grow. Home infusion companies that follow the model of yesterday will suddenly find themselves left out of managed care and preferred provider contracts, not to mention lacking qualitative and quantitative data for specific patient diagnoses. The question is, then, what’s the best way to diversify?

The answer is, there’s more than one answer, says Kevin P. O’Donnell, president of Healthcare Resources of America in Lewisville, TX. The two areas getting the most attention now are becoming a one-stop shop or getting into disease state management. O’Donnell says one is inherently easier than the other.

For a home infusion agency to become a one-stop shop, O’Donnell says, you would have to look at four different industries:

1. Medicare/Medicaid/government reimbursed

2. private duty care;

3. home medical equipment/respiratory therapy;

4. home infusion/pharmacy specialty care.

Such "horizontal integration" is often best achieved through networking and establishing relationships with providers of the areas you lack. But taking that route can be difficult and time-consuming, says O’Donnell. That’s why he says you may want to take a careful look at the alternative: creating a specialty care niche.

Be selective

"You have to realize home infusion in and of itself is not a big deal anymore," he says. "People don’t go to hospitals to get infusion; they go in for something else — a diagnosis — and home infusion providers should think more like that, to treat all the needs of a single niche."

That may require adding services to those you already offer, though. For example, if you offer infusion to pediatrics, you need a nursing component to effectively enter the niche. In essence, says O’Donnell, you’re providing a one-stop shop but just for that niche.

"You can’t consider yourself a hi-tech pediatric home care company and not do the nursing," he says. "It sounds ludicrous, but some people take that approach."

Taking aim at certain specialties is how Infusacare, a home infusion agency in Jackson, MS, began. When it opened its doors in July 1993, Lee Atkins, RPh, the company president and owner, chose to specialize in certain areas, pediatrics among them.

"I had eight years of pediatric pharmacy experience here in Jackson," he says. "By virtue of that I knew most of the pediatricians in town, and I also knew there wasn’t a pediatrics-specialized pharmacist in town."

Four years later, pediatrics accounts for 30% of Infusacare’s gross revenues.

There are ways other than previous exposure to a niche when searching for potential areas of specialization for your agency.

"It takes effort because payers aren’t going to say ‘We would really like a program that looks like this,’" says O’Donnell. "The best way to identify where you should diversify is to meet with payers and determine what their problems are. Do an assessment of them, like you would a patient. Where does it hurt? Where are they spending the most money?"

Hire experienced staff

Once Atkins had selected the areas he felt Infusacare could successfully pursue, he found specialization easy. Simply hire staff with expertise in that area.

"For pediatrics, 85% of what we do is hydration therapy," he says. "So therefore, I employ pediatric nurses."

The other niche Atkins set his sights on in 1993 was HIV, which accounts for another 30% of Infusacare’s gross revenues.

"At that time in our area there was still not a widely accepted attitude toward treating HIV patients in the home," says Atkins. "Most of the home health agencies did not want to get involved in that, and their staff was very timid about it, so the area was very open for advancement."

Similarly to pediatrics, Atkins is always on the lookout for nurses well-trained in HIV and it’s related diagnoses and also concentrates a great deal of continuing education in the areas. Atkins says that once you’ve done your homework and selected a feasible niche, don’t make a half-hearted attempt to enter the niche. Make sure you do it properly from the start by hiring staff experienced in that area.

"By having a plan that those were areas I was going to pursue and thought I would be successful in, I felt confident investing in the employees that would adequately service those areas."

But it wasn’t just the reluctance of other agencies to treat HIV patients that helped push Infusacare toward that market.

"I catered to HIV because there was a Ryan White Fund grant available," says Atkins.

By looking at potential funds and reimbursement, Atkins was able to not only enter a severely underserved niche in Jackson but do so knowing funds would be there through the grant.

That approach has worked well since Infusacare’s beginning. Of the 40% gross revenues that are non-pediatric/HIV-related, half are derived from workers’ compensation. Again, it’s an area where reimbursement is nearly trouble-free.

Workers’ comp patients are rarely complex in that they almost exclusively require long-term antibiotics, says Atkins, following the infection of job-related cuts or lacerations, or for postoperative knee surgery. The simplicity of the patients isn’t the best part of dealing with the niche, though.

"Workers’ compensation is 100% reimbursed. You get your money, and you get all of it," says Atkins. As a result, the two niches Atkins approached with reimbursement in mind are the only areas in which he has no trouble getting paid. "Ryan White Fund money and Workers’ Comp are 100% reimbursed," he says.

The most common problem with pediatric reimbursement for Infusacare is when a non-Mississippi based company’s employee has insurance through a national contract.

"Say it’s through Cigna, and when you call Cigna to pre-cert, they have a national contract with Apria for home infusion," says Atkins.

He’s found a way around the problem, though.

"Nine times out of 10 they will simply ask you for your price, and if it meets or is below their national contract fees, they will allow you to do the case," although Atkins adds that trying to bid below the national contract rate is often "a shot in the dark."

You don’t have to be an expert

Conversely, reimbursement through workers’ compensation is extremely easy and doesn’t require any special reimbursement background or skills.

Although Infusacare is no longer the only company pursuing workers’ comp, Atkins says he has stayed on top by keeping the other side’s perspective in mind.

"I continue to sell on the point that we will save them money by virtue of producing these types of outcomes," he says. "But it’s not about who has the lowest price on the first day of six weeks of vancomycin; it’s about what does the overall therapy cost, and what is the outcome. Remember, their sole goal as case managers is to return this person to work as soon as possible. That is how they make their money."

Because of the increased competition, Atkins is currently evaluating additional areas for Infusacare to serve, including long-term care IV and support, and potential compounding for small rural hospitals within a 50-mile radius of Jackson.