Hot partnerships leave others cold

Wednesday, October 24, 2012

ALTOONA, Pa. – Provider Jim Young knows all anyone wants to talk about these days is accountable care organizations, but he’s not convinced they’ll be a good thing for the industry.

For many HME providers, this rule, included in the Affordable Care Act of 2010 (ACA), has created an opportunity to the industry to help hospitals reduce readmissions. But for every provider that aligns itself with a hospital to provide DME to its patients, there are others who find themselves on the outside looking in.

Young, general manager of Dick’s Homecare, lost a big chunk of its business earlier this year when Altoona Regional Health System began using a single preferred HME provider—one affiliated with the health system—to service discharged patients, as well as its hospice patients.

“We are getting beat up,” said Young, who estimates revenues have declined by about 20% in the last several months at the Altoona location. “We didn’t think we would get (the contract), but in the counties they service we have physical stores which could offer much quicker and more convenient service. The hospital DME has one location.”

There’s no doubt that the ACA is changing the direction of health care. Providers must think long and hard about what they want their role to be going forward, says Alan Morris.

“Historically, if a hospital isn’t paid to see reductions (in readmissions) then the DME sees no value in proving ability to reduce readmits,” said Morris, director of alternate care programs for The VGM Group. “That’s changed. First and foremost, they have to be able to measure their ability to reduce readmissions and improve outcomes.”

Fortunately for Dick’s Homecare, the provider has seven other locations that haven’t been affected, which has helped offset some of the losses at the Altoona location. Still, Young acknowledges that health care is changing. The provider was approached by several other hospitals seeking to form a joint venture.

“One hospital said, ‘We will give you space in the lobby where you can set up shop,’” he said. “We looked at it but it’s not what we, as a family owned business, are about. Unfortunately, we might lose in the way health care is going.”