Nursing Finds Its Way Home

By Diane Dillon Ryan

Back in the early '80s, nurses for the most part, worked in facility-based settings, with a preponderance in the acute care setting. Home care, in its infancy, was beginning to be recognized as an option to hospital care. Back then, many acute care nurses felt under-respected and unfulfilled in their work, ultimately resulting in understaffed facilities.

Seeking more career control and independence, increased flexibility and earning potential, and an opportunity to deliver better patient care, nurses began to seek professional opportunities in home care.

Initially, most home care nurses worked for existing companies as caregivers or administrators. Some enjoyed the Monday through Friday daytime hours typical of certified home care agencies. Other nurses took advantage of flexible shift work associated with seeing one patient at a time, appealing to their caregiver side.

But as nurses moved from facility-based care to home care, they became revenue producers and not just an expense. Because there was a shortage of home care nurses back then, clinical home care providers were able to position themselves as primary business drivers because they were in high demand. Home care companies had to find ways to keep their nurses content to further increase their revenue streams. As a result, home care nurses enjoyed unprecedented respect and control - a remarkable contrast to what they had experienced in hospital-based settings.

Reorganizing into DRGs
In the mid-1980's, when DRGs (Diagnostic Related Groups) surfaced in acute care settings, hospitals responded by reducing costs, in turn diverting patient care spending to the less-costly home care setting. Simultaneously, as acute care facilities laid off clinicians to reduce costs, many who remained grew weary of the increased workloads and sought refuge in home care, filling the growing need for clinicians in that setting. Home care began to experience exponential growth, providing more nurses with rewarding employment alternatives.

At this time, some nurses opened their own proprietary companies, seeking a profit-driven environment. Many others started less-risky, cost-reimbursed, Medicare-certified companies, which appealed to their caregiver orientation and provided income opportunities far superior to anything they had experienced to date. The reimbursement limits were generous and losses were highly unusual, so no market forces deterred the growth or viability of a certified agency. If clinicians could document the need for quality care, the care they provided would be reimbursed. It all seemed to work.

Reduced Reimbursement
But with the increased acceptance of home care and little reasons to ration care, home care expenditures exploded. Enough so that in the mid-1990's, private insurers were compelled to restrict services and reduce prices. The government followed suit, ratcheting down cost limits and challenging utilization rates. The new environment changed the way home health agencies and nurses conducted business, shifting emphasis away from providing patient care to managing costs and running a business.

Clinical pathways then emerged, with a focus on cutting the number of home visits a company provided to stay under the reduced reimbursement structure. Proprietary agencies began developing disease management programs for managed care patients. This enabled them to break away from the low-margin visit rates and replace them with higher margin "flat price" programs based on diagnosis and level of acuity.

Interestingly, although home care companies feared the erosion of quality care, we actually saw an intense focus on the clinical management of patients. Providing good care remained important. But the focus shifted from clinicians caring for patients to clinicians educating patient to provide much of their own care. Such scrutiny on quality stimulated the need for quantifying outcomes, leasing to capturing more clinical data and developing management information systems to process the information into useable outcome reporting. This period challenged nurses to provide quality care in the most efficient manner possible, which in retrospect was a positive step in the provision of home care.

Alas, the delicate balance between patient care and cost was thrown into turmoil when the Balanced Budget Act of 1997 and the Interim Payment System were passed. Under IPS, traditionally low-cost providers are being penalized with per-beneficiary limits that are lower than their less cost-conscious colleagues. The government has slashed utilization rates to stay under these limits, and agencies are not providing services to chronic patients to avoid exceeding the limits. The focus has shifted from managing patients to managing dollars.

Future Market Shifts
Are home care nurses forever doomed to relive the burnout, loss of status and lack of attention to patient care that many previously experienced in hospital-based settings? Despite the current climate, I don't think so.

The private sector is beginning to see the pendulum swing back to a focus on quality of care as managed care pricing is slowly but surely inching upward. Proprietary agencies, because of their primary focus on servicing the private reimbursement sector, will be the first to enjoy these pricing opportunities. However, once the Prospective Payment System is initiated in October 2000 and certified agencies are permitted to make a profit, the dichotomy between certified and proprietary agencies will begin to blur. Like their proprietary colleagues, certified agencies will find opportunities to differentiate themselves in the market based on quality of care. It may take some time, but market forces will restore the delicate balance between patient care and costs in home care.

Having participated in both ends of the spectrum, I am certain the nursing profession will be well equipped to serve both masters with skill and compassion.