How to compete with hospital-based providers
How to compete with hospital-based providers
Specialization, innovation pay off
To many private duty providers, hospital-based home care programs seem to have the deck stacked in their favor. After all, the those programs can liberally access patients, discharge planners, and physicians. And when patients choose their home care providers, discharge planners may emphasize the hospital program over competitors. Institutional-based providers also usually benefit from the hospital's contracting machine, dovetailing on managed care contracts that independent providers struggle to obtain.
But both independent and hospital-based sources say those advantages can be overcome, and hospital programs have limitations and vulnerabilities that may strengthen private duty providers' hands. Your private duty company can hold its own, sources say, if you follow these tips:
1. Specialize and generalize.
Offering specialized or unique programs is one way independent companies can edge-out hospital competitors, says Sharon Brown, MS, RN, vice president of Health Care Alternatives Inc., an Edmond, OK-based home care consulting firm. "Physicians really want clinically strong, high tech services" and will recommend these programs to their patients, she adds.
Marshaling the specially trained staff, policies and procedures, and patient education materials for high-tech services such as pediatric continuous care can distinguish your company from hospital agencies that often provide basic home care. But don't stop there, Brown cautions. While you may be known for a certain type of care, it is important to offer a broader range of services to follow patients as their disease process changes, spread agency costs over more activity and diversify revenues.
Addus Healthcare in Spokane, WA, offers a unique program that works to its advantage. The company's direct service workers provide personal care, shopping, respite, and overnight services. Clients pay out of pocket for such Medicare- disallowed services. The program fills a void for patients who do not have more skilled needs covered by Medicare or private insurers but may require assistance transitioning from hospital to home or have long-term chronic conditions.
Stacey Pederson, private pay supervisor/coordinator, markets the program by meeting one-on-one with geriatricians, internists, and family and general practitioners; speaking to local senior and support groups such as the cancer society and Alzheimer's association; and advertising in the Spokane senior and telephone directories. She meets with hospital discharge planners, but Addus sees few hospital-generated referrals. Much business is through physician referrals and word-of-mouth recommendations from satisfied customers.
2. Contract, contract, contract.
Hospital-based providers' inclusion in their parent organization's managed care contracts is a real advantage, especially in capitated markets. Insurers may not give an independent company an audience, much less a contract. Consider creating a contracting consortium with other independents, Brown suggests. The affiliated companies can then offer a full range of home care services, combined billing, and more competitive pricing than hospital-based programs, becoming more attractive to managed care organizations.
Offering specialty services may open doors with insurers. And once you land a contract, provide top-notch care, says Robert Brienholt, executive director of Alpine Home Care in Salt Lake City. "The best way to compete is to provide the best care and let referral sources know about it."
3. Be first out of the box.
It is important to know your community, says Brown. Talk with payers, referral sources, and community groups. When you recognize a service need, respond quickly. Hospital-based competitors are generally slower-to-the-draw, Brown notes, and your speedy reaction may win-over payers and referral sources alike.
4. Serve the underserved.
Private duty providers can sometimes gain a toehold by serving underserved areas. Columbia, SC-based Health Force is now pursuing this strategy. Because it's a new agency in a city with several large hospital-based and independent home care companies already operating, "we have to prove ourselves for physicians to refer to us," says Valerie Aiken, administrator. The company's caseload includes many patients in both isolated and inner-city areas.
5. Fight institutional bias.
Hospital discharge planners are the gatekeepers, influencing home care referrals in large and small ways. While ostensibly offering choice, they may strongly recommend the hospital program, swaying patients by suggesting they can only guarantee the quality of the hospital's services, sources say. And it doesn't stop there. Sources also report instances of their hospitalized patients being discharged into the hospital's home care program.
Consider strongly worded protests to the hospital chief executive officer in either situation, says Elizabeth E. Hogue, a health care attorney specializing in home care in Burtonsville, MD. Com plaints about discharge planners' inappropriate comments, however, are generally only effective if accompanied by affidavits from the clients who heard the statements or staff members to whom the clients subsequently relayed information, she cautions. Otherwise, the issue typically devolves into a hearsay contest with no clear resolution.
If you are unable to pursue a pointed response, your company can still make inroads, says Brown. "Work with discharge planners. Let them know you'll provide a very personalized service and feedback. Call them after the patient goes home."
To thwart your hospitalized patients' redirection into the hospital's home care program, Aiken recommends closely tracking patients, educating clients about their right to choose home care providers, and contacting the patient's physician, reminding them of your company's involvement.
6. Maintain relationships with physicians.
Physicians should not be left out of the equation, says Brown. Meet with them, educate them about your services, and provide good feedback on patients. "Let them know they'll get a call after a patient goes home and not just every 60 days for re-certification," she adds.
7. Keep existing business.
Private duty services, in particular, encourage nurse-patient loyalty. Patients bond with their caregivers and may follow them to a new organization. "This can be devastating to a small company," says Brown. "Take care of your employ - ees," she adds. Engender staff loyalty with a professional, supportive environment. And "hire good people to begin with. If an applicant comes and says they can bring `X' amount of business, just remember, the same referral base can follow them [when they move on to another company]."
8. Capitalize on your strengths.
Private duty providers often have important advantages over hospital agencies, says Frances Lekwart, assistant vice president for Memorial Home Health in Houston. Hospital programs are not always price-competitive, especially for client-paid services such as companions, she adds. Independent companies may win referrals simply because of their price edge.
Independent companies' professional private duty services may also be better positioned than their hospital competitors, Lekwart says. Hospital departments or agencies that are connected to the hospital's compensation and benefit structure through legal and organizational ties may have difficulty recruiting and retaining private duty staff, she adds. They may only be able to staff cases in limited geographic areas or with restricted hours. Independent companies with more flexible compensation and recruitment practices may offer wider coverage and more competitive rates, besting themselves before payers and physicians alike.
Not all hospital agencies have dedicated marketing staff. They may also have limited advertising separate from their parent hospital. Private duty providers' marketing and advertising efforts may be advantageous for more consumer referral-driven services such as custodial care, she says.
And home cares' small-cog status within hospitals' big wheel size can sometimes make it more difficult to receive a fair share of organizational resources, sources say. So to compete, private duty providers may have newer technology and more state-of-the-art programs.
While continuing to forcefully compete, private duty providers should also watch for further developments. As a result of Balanced Budget Act of 1997 cuts and impending Medicare prospective payment system implementation, hospitals are evaluating their home care operations, both Brown and Hogue say. Many may either discontinue their programs or seek contracts with outside companies, changing the entire competitive landscape.
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