Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode.

Dan Gorenstein: On February 13th, 2017 Dave Zaas was a doctor and president of Duke Raleigh hospital.

By Valentine’s Day…he was a patient with a dire diagnosis: acute myeloid leukemia.

David Zaas: I was away from home for six months.

DG: 318 miles north at John Hopkins Hospital in Baltimore…away from his wife and two teenage sons…Dave felt something that he’d never felt before

DZ: I realized how lonely and cold the hospital can be, especially at night.

During the day, I was busy, I was interacting and talking to my wife. At night, you’re alone. At night, your mind races and thinks about all those things that you don’t want to think about. Are my kids going to grow up without a father? Am I going to die from a complication? How is my wife going to be as a single mother? And you try to push those thoughts away. But at night, when you can’t sleep and you don’t feel well and you’re alone, those thoughts keep coming back.

DG: And Dave realized something else…as much as he enjoyed working in the hospital…it was the last place he wanted to be as a patient.

DZ: You want to be home. You want to be in your own bed. You want to be with your family.

That was the moment that I first started to question. What can we do outside the walls of the hospital?

DG: Six months later…Dave Zaas returned to work, thanks to a bone marrow transplant from his 13-year-old son. And he came back wanting to help other patients avoid that lonely, cold feeling.

DZ: That’s what pushed us to really start exploring the evidence behind hospital at home.

DG: Today, has the moment to bring the hospital to the patient’s home finally arrived?

From the Annenberg Studio at the University of Pennsylvania, I’m Dan Gorenstein, and this is Tradeoffs.

Providing hospital-level care in people’s homes seems like an innovation tailormade for this moment.

Bruce Leff: I think it was Milton Friedman who said something along the lines of when a crisis hits, people look for ideas that have just been laying around. And this has been laying around for a while.

DG: Physician and researcher Bruce Leff began studying the feasibility of hospitalizing patients with simple conditions, like pneumonia and heart failure, at home, back in the 90s.

Bruce says it’s obvious…the coronavirus has put hospitals in a bind.

News clips:
ER visits are down in many hospitals because people are afraid to go to the hospital.
The number of visits to the ER have dropped by about one-third.
They are seeing 50-percent less adult patients than usual.
People are not going to the ER when they actually should be and it’s turning into a deadly problem.

DG: Most have sat empty while others have been overrun. Bracing for a surge…large hospitals have combined to lose a billion dollars a day and cut thousands of jobs.

In other words, COVID has blown up the business model for most hospitals.

BL: What’s become apparent to a bunch of folks is the need to create surge capacity in a way that doesn’t, you know, totally bankrupt you.

DG: Bruce thinks ‘hospital at home’ programs can act as a kind of pressure valve.

The typical model combines in-home visits and treatments with telehealth. It can be used to replace an inpatient stay altogether or to end one early, completing recovery at home…including for COVID patients.

So hospitals can be ready for a winter wave…and keep seeing patients and bringing in cash.

BL: I think folks are seeing that there is a need to create capacity in a way that aligns with business models. And I think hospital and home can do that. You can ramp up and you can pull it back.

DG: The other benefit to hospital at home – there’s 20 years of evidence. And Bruce says, it’s rigorous and it’s strong.

BL: So, in meta analysis, where you take a bunch of small, randomized controlled trials and you group them together, mortality at six months is about 20 percent  lower for hospital at home compared to typical hospital care.

I think if you would ask most patients when they’re in the emergency department and given the choice and you say to them, hey, you know, if if you go home, you have a 20 percent lower risk of being dead in six months. That’s that’s pretty compelling.

DG: In the most recent randomized controlled trial…the first one done in the US…home stays also proved 40% cheaper…patients had fewer lab and imaging tests done…and they were three times less likely to end up back in the hospital within 30 days.

Until now, executives have been slow to design hospital at home programs.

Look at Duke Raleigh – it took the president having a near-death experience to warm to the idea.

As of today, just a few dozen hospitals offer the service…less than 1 percent of America’s 6000 hospitals.

But the coronavirus may be changing the game.

Travis Messinaa: There’s been a tremendous amount of interest in the program.

Raphael Rakowski: We’ve had about nine major conversations taking place. One is taking place today at four o’clock.

DG: Travis Messina…

TM: Founder and chief executive officer of Contessa

DG: ….and Raphael Rakowski

Raphael Rakowski: One of the co-founders and CEO of Medically Home

DG: …head the companies that are the frontrunners in a small but burgeoning sector selling hospital at home support services.

Moving care safely out of a billion-dollar high-tech hospital and into a bunch of people’s homes is no small feat. And while hospitals can do it, not everyone wants to.

TM: If I’m totally candid, does every health system in America have the ability to run a home recovery care program on their own? Absolutely. I think the question that they need to ask themselves is, is that the highest and best use of their time and their capital?

DG: Both companies provide a similar suite of services, handling the supply chain, training, tech and other logistics…leaving hospital staff to focus on delivering care.

Contessa recently helped Mount Sinai double their program’s size in response to COVID.

And Medically Home just announced new contracts with Tufts and Adventist Health, both catalyzed by COVID.

For Raphael, it’s been especially mind boggling to see business finally booming.

RR: So imagine if you had more outcome and more impact in 12 weeks you had in 12 years. I have mixed feelings. On one hand I feel great that, you know, our time has come. On the other hand, I feel that if it came because of all of this pain and suffering, that makes me very sad. But that’s the mix of feelings I have all day long now.

DG: So will all this new interest in hospitalizing patients at home amount to a flash in the pan or a fundamental shift?

The answer likely hinges on two big unknowns: payment and hospitals’ interest post-COVID.

Some insurers have started to pay for hospital care at home in recent years, but the white whale has always been Medicare, which covers most of the older adults likely to be hospitalized at home.

Back in 2017 federal health officials did ask a committee known as PTAC to study whether and how Medicare should pay for the program.

PTAC Recording: The first proposal this morning we will discuss is entitled Hospital at Home Plus, Provider Focussed Payment Model

DG: Brookings fellow and physician Kavita Patel sits on that federal committee, which reviews several new payment models every year.

Kavita Patel: This is one of the few where in our voting. we were like effusively unanimous about it. And in fact, I think my words back then, and it’s on the record, I think my words were like run and do not walk to kind of get this model done. And I knew that wasn’t going to happen, that I wanted to make a point that this rose to a level, way, way, way, way higher than many of the things we’ve seen and could be a game changer. And I still believe that to this day.

DG: Kavita was skeptical Medicare would sign off because the feds worry more about fraud and cutting corners when care happens outside the hospital.

KP: Medicare or any payer has always been reluctant to pay for something that is done outside of what I would call conventional facilities or conventional visits, honestly, mostly for fear of abuse. It’s the reason telehealth visits were barely existent before COVID.

DG: But as they now say…then came COVID…

And the Centers for Medicare and Medicaid Services, CMS, began issuing emergency waivers giving hospitals flexibility to increase their capacity.

Their latest guidance, issued in May, seemed to describe the hospital at home model, complete with a clip art home at the center.

Kavita says it’s generated some confusion.

KP: I’ve talked with people at CMS who have said the regulations they’ve issued fit hospital at home, you can do hospital at home is basically what some people will tell you. Lawyers have said, no, that’s not the truth, and CMS needs to be more clear.

DG: A CMS spokesperson confirmed the rules do allow hospitals to get paid for care in the home….under certain conditions.

But Kavita believes health systems still need more clarity before putting the pedal to the metal on this idea.

That leaves the question of post-COVID interest from hospitals.

Until this spring….executives have been cool to bringing care into the home. If business as usual picks back up, will their interest fade away?

Kavita thinks hospitals will be shaken enough by COVID that they’ll stay motivated to make this model work…as long as they can get paid.

KP: The hospital has been forced to think differently. If you think that it can help with your both revenue as well as productivity, you’ll figure out a way to do it. And that’s exactly what I think could happen.

DG: Of course it’s much easier to talk about change than to implement it, says Bruce Leff, especially for hospitals if they can keep raking in profits while doing things the old way.

BL: I think a lot of health systems understand that they need to change what they do. Some of them actually may mean it. Most really don’t probably. But there’s still a difference. Even if you do understand, you need to change actually knowing what to do and how to change. It’s hard. It’s not easy.

DG: I’m Dan Gorenstein and this is Tradeoffs.