The Limits Of Efficiency In Home Health’s Cost-cutting Era

With reimbursement pressures, rising inflation and rampant workforce shortages, efficiency has become a top priority for many home-based care providers. But efficiency initiatives carry certain risks if not executed with precision.

The home-based care industry must retain a long-range view when looking to improve efficiency, according to Zac Long, CEO of Well Care Health, a family-owned and operated home health and hospice provider.

“I do worry [that] there’s going to be a lot of pressure for organizations to cut cost, cut cost, cut cost,” Long told Home Health Care News. “To me, it’s really important that as an industry … we don’t cut off our nose to spite our face with some of those initiatives.”

Wilmington, North Carolina-based Well Care Health serves 40 counties in North Carolina and South Carolina. The company divested its personal home care division to Avid Health at Home in 2023, and is now “laser focused” on its Medicare-certified home health and hospice service lines. It employs approximately 700 team members and has a daily patient census of approximately 5,000.

Long keeps his focus on the long haul, he said, a perspective that plays into his approach to cost-saving efficiencies like AI tools.

“What AI does is just basically pour gasoline on an existing process,” Long said. “So if that process isn’t 100% buttoned up and compliant, it can create a lot of risk when you pour gas on it. I just hope that folks are taking a step back and looking at the full picture in the long term, as opposed to trying to create short-term cost reductions.”

The home-based care industry is currently rife with AI “noise,” Long said. He has invested in “best in breed” technology platforms, and plans to explore AI pilots – but said he remains focused on ROI and value-add.

Well Care is comfortable being a fast follower of AI, Long said.

Reimbursement and growth strategies

Well Care is still seeking to increase efficiency – while staying wary of long-term risks of short-term successes. The organization is also staying mindful of overhead costs and working to create economies of scale and improve its managed care relationships in response to uncertain reimbursement rates.

Embracing managed care is a necessity for providers, Long said, so he aims to position Well Care as a natural, solution-minded partner for these care plans.

“We have varying degrees of, I’ll say, alignment with them, but that’s something that we’re continuing to try to increase,” Long said. “So that’s a key part of our strategic priorities.”

While navigating choppy reimbursement waters, Well Care is still pursuing what Long called “responsible synchronized growth,” which he said entails growing in alignment with the company’s reputation and culture.

One growth lever for Well Care has been participation in several certificate-of-need processes over the last three to four years. This has created a robust growth pipeline, he said, and he expects continued significant growth.

Well Care is continuing to expand its market penetration in North Carolina and South Carolina, focusing on its current de novo growth pipeline while remaining opportunistic about potential acquisitions.

Long sees the company’s largest opportunity in hospice services. Hospice growth will help diversify the company’s revenue profile, Long said, but the benefits of this expansion start with the potential for patient growth, Long said. The company has partnered with a care transitions platform that allows the company to identify hospice-eligible patients among its home health census.

“We work really hard to implement a hospice program that we’re several years into, and the stories and the potential that we have in terms of being able to bridge the care continuum between home health and hospice is just incredibly powerful,” Long said. “That’s something we’re really passionate about. I think we’ve got a tremendous amount of opportunity in terms of growing our hospice program in a way that overlaps our existing home health footprint.”

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