Accelerating the Shift of Healthcare from Facilities to Homes
Published by
Gabriela Perez Hobson, Chief Growth Officer
on
By 2025, up to $265 billion in care services for Medicare beneficiaries could shift to home-based care, according to McKinsey¹. As I reflect on HLTH 2024, I’m excited to have had the opportunity to explore innovative solutions that support the growing demand for aging in place and how risk-bearing organizations can rapidly adopt value-based programs to make the home an effective primary site of care.
This shift is driven by an aging population (by 2030, 1 in 5 residents will be of retirement age²), rising chronic conditions³, and tech advancements like remote monitoring, virtual care, and integrated home-based care platforms such as Tomorrow Health. These innovations enable high-quality care at home, reducing ER visits and readmissions while delivering end-to-end visibility, reliability, cost savings, and higher patient satisfaction. However, many health plans are yet to adopt the tools required to respond to the growing demand for home-based care effectively (reimbursement parity is not yet clear either).
For instance, the $63 billion⁴ U.S. durable medical equipment (DME) market plays a pivotal role in this transition but poses challenges for health plans. If not managed properly, roughly 40% of DME claims are vulnerable to fraud, waste, and abuse⁵, while delays in DME fulfillment increase readmission risks by 30%⁶. Fragmented networks, often deprioritized due to limited resources, can reduce patient satisfaction by 20 points, directly impacting quality measures. On top of that, the burden of coordinating DME for a loved one at home adds stress, turning it into a ‘black hole’ in healthcare. Patients and caregivers deserve better.
Every dollar spent on DME yields $23 to $41⁷ in healthcare savings, highlighting the need for optimized spending.
At HLTH, we discussed how technology and value-based benefit management—especially for DME—are essential for managing costs and enhancing patient satisfaction where it matters most: at home. Every dollar spent on DME yields $23 to $41⁷ in healthcare savings, highlighting the need for optimized spending. For example, a year’s oxygen therapy at home costs the same as one day in the hospital, where the average stay is $3,025⁸. Beyond cost savings, quality care is paramount—88% of Medicare beneficiaries view DME as crucial to their satisfaction, influencing Star Ratings and CAHPS scores⁹.
Shifting to home-based care isn’t just a trend; it’s a business imperative for healthcare organizations in a value-driven landscape. The opportunity to optimize home care is immense, but it requires key investment in the right technologies and programs to deliver real impact: lower costs and improved outcomes. When a thoughtful, integrated strategy connects key stakeholders—prescriber, supplier, care manager, payor, and patient—home-based care becomes feasible and transformative. At HLTH, I enjoyed collaborating on actionable strategies that maximize value and keep patients at the forefront of every decision.
Sources:
¹McKinsey “From facility to home: How healthcare could shift by 2025” by Oleg Bestsennyy, Michelle Chmielewski, Anne Koffel, and Amit Shah.
² Bureau, U. C. Older Population and Aging. United States Census Bureau https://www.census.gov/topics/population/older-aging.html (2023).
³Centers for Disease Control and Prevention (CDC). Raw data sourced from “2023 National Population Projections Tables: Main Series”, which utilizes official estimates of resident population on July 1, 2022 as the base for projecting the U.S. population from 2023 to 2100, and Boersma, et al., “Prevalence of Multiple Chronic Conditions Among U.S. Adults, 2018”.
⁴U.S. Durable Medical Equipment Market Size, Share & Trends Analysis Report By Product (Monitoring And Therapeutic Devices, Personal Mobility Devices), End Use And Segment Forecasts, 2024 - 2030, Grand view research
⁵Government Accounting Office (GAO), 2020
⁶Inadequate DME coordination contributed to a 30% increase in hospital readmissions among patients with chronic conditions, Journal of General Internal Medicine
⁷The Case for Medicare Investment in DME, Brian Leitten.
⁸American Association for Homecare, Howard, J, Kent., Improved Cost and Utilization Among Medicare Beneficiaries Dispositioned from the ED to Receive Home Health Care Compared with Inpatient Hospitalization. American Journal of Accountable Care, vol. 7, issue 1 (March 2019) and KFF and Consumer Shield Report, 2022
⁹ Results of Tomorrow Health survey of partnered health plan members, 2024.
