The majority of healthcare finance managers view home care as a key area of investment.
This is according to a recent survey by BDO, a Chicago-based accounting, tax, financial advisory and advisory organization. The survey, released on Monday, includes responses from 100 CFOs at U.S. health organizations, including home health providers, with sales between $ 250 billion and $ 3 billion.
In particular, 12% of the CFOs surveyed were executives in home health or hospice organizations.
The COVID-19 virus is one of the drivers who prioritize home care. One of the effects of the public health emergency is that many health organizations have been forced to reassess their priorities and areas of expertise to address patient needs.
Looking ahead to 2021, 59% of the CFOs surveyed identified home care as a priority investment.
This finding also suggests that home care providers have demonstrated their value in providing care in recent months. As the US continues to face a sustained surge in COVID-19, the demand for home care is likely to continue to grow.
“Home health has made many important contributions to the value-based supply chain,” Steven Shill, partner and national director of the BDO Center for Healthcare Excellence and Innovation, told Home Health Care News in an email. “I think the pandemic just served to validate an already valuable process.”
Aside from home care, 56% of finance managers surveyed identified elderly care as a priority investment.
A further 77% of the CFOs stated that they wanted to finance the basic service.
“A significant number of primary care physicians are the elderly,” Shill said. “With the transition to Medicare Advantage, basic home care will accelerate. The reason is that when a doctor, or a nurse [physician’s assistant] Visiting higher-risk patients to their homes will reduce the likelihood of patients needing emergency room admissions, hospital stays in acute care, or institutionalization in a hospital [skilled nursing facility] for example. This will likely lower the overall cost. ”
The survey not only identified key investment areas, but also addressed emerging trends. From an M&A perspective, for example, 42% of the CFOs surveyed stated that the COVID-19 emergency will lead to increased consolidation across the healthcare system.
Indeed, according to Shill, many health organizations with already weak balance sheets went into the public health emergency.
Many have stayed afloat thanks to the Paycheck Protection Program (PPP) and funding from the CARES Act, but at some point these wells will run dry.
“The focus on consumption, moving towards value-based care, and taking an important step towards digitization in healthcare – trends that existed before the pandemic – all contributed to the consolidation,” Shill said. “Many pre-pandemic healthcare organizations did not have the resources to address these trends, which in turn resulted in a weakened position in the marketplace, increasingly inefficient operations, and significant patient volume losses that ultimately led to financial debilitation led you must either merge, acquire, or shut down. ”
In addition, BDO’s survey found that partnerships are expected to be the focus in 2021.
Approximately 31% of the CFOs surveyed said they had plans to acquire medical practices. Another 28% said they were planning a merger with another organization, 24% plan to set up a joint venture.
In the home care sector, this move towards partnerships could be a business opportunity for providers.
“The home health sector has historically been highly fragmented, often lacking professional leadership and adequate capital investments,” said Shill. “That’s why private equity drew a lot of attention in the few years before the pandemic. As institutional health care continues to focus on value-based care and superimpose it with the effects of the pandemic, this type of partnership seems likely to accelerate. ”
BDO’s survey was conducted by Rabin Research Company, an independent market research company.