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How to Overcome the New Realities in Home Health Budget Strains

In navigating fiscal uncertainties, it is essential to acknowledge technology as a powerful ally, securing the resilience and long-term sustainability of home care for generations of patients and caregivers to follow.


When the U.S. Centers for Medicare & Medicaid Services (CMS) revealed its CY 2024 final payment rule, home health providers once again faced a familiar fiscal challenge. A 2.89% cut to Home Health – remarkably down from the Biden Administration’s 5.1% proposed cut is a familiar reality for providers in this crucial sector. Homecare budgets are often overlooked, even as costs continuing to escalate. Just in my home state of New York, 932,000 people will require home health assistance by 2035. The pressing question emerges: how will the homecare industry meet the escalating demand while grappling with a diminishing budget?

Home health organizations such as The Partnership for Quality Home Healthcare have been outspoken in expressing their dissatisfaction with the recurrent budget cuts, and I wholeheartedly agree. But as a 30-year veteran of this industry, I’ve also been in this situation before, and understand we have to figure out how to do more with less, while protecting the health of our patients at all costs. Amidst these financial challenges, a silver lining emerges in the form of technological innovation. Harnessing the power of technology can be a strategic and transformative approach to navigating the impact of budget cuts on the home healthcare sector. Here’s how leveraging technology can not only mitigate the adverse effects of reimbursement reductions but also enhance the overall quality of care and wellbeing, which is the foundational goal of our work.

Improved accessibility

Despite financial constraints, the integration of technology not only offers a cost-effective alternative but also ensures easier access to caregivers for patients. Through telehealth platforms, patients can conveniently access consultations, share vital health data, and receive guidance from the comfort of their homes, fostering a more accessible and patient-centric approach to home care despite the challenging budgetary landscape. This can prove to be especially impactful in home health “deserts” where healthcare infrastructure, and mainly healthcare professionals, are lacking.

Supporting the workforce

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It’s no secret that the healthcare industry is facing widespread burnout and shortages among the workforce. The reasons for that are so multifaceted that I could dedicate a whole article to them, but generally speaking, frontline health workers are asked to take on more than they ever have. These budget cuts aren’t going to make life easier for workers, as providers will have to get creative to make ends meet. That said, technology is proving to be a gift to overburdened caregivers. The explosion of telehealth means nurses can connect with dozens of patients at a time, while providing the same level of personalized, high-quality care. Machine learning and AI can automate what is otherwise mundane, time-consuming tasks that add to burnout, frustration, and long hours. Whether its generating invoices, tracking inventory, or managing schedules, new technologies carry the burden of administrative office work so caregivers can focus on their most impactful work – providing personalized care and ensuring the best health outcomes for their patients.

Reducing hospitalizations 

The goal of any technological health solution – whether its RPM or telehealth consultation – is to bring the capabilities of a full-service hospital to the patients home. We are seeing this happen already: a recent study from the Journal of American Medical Association recently found that RPM can be associated with a 87% reduction in hospitalizations. Less hospitalizations means less healthcare episodes, especially for homecare’s patient base, many of which are vulnerable populations that experience further stress and anxiety from the hospital experience. So, a reduction in hospitalizations is a predictor of better health outcomes and a money saver across the entire health ecosystem – insurance, patients, and providers. By leaning more into technology, the home health industry can begin to offset the financial constraints that these budget rulings may pose. In return, the strategic integration and optimization of technology go beyond merely enhancing efficiency and organization for caregivers; they hold the potential to significantly impact broader healthcare outcomes.

In the face of undeniable challenges posed by budget cuts in the healthcare sector, the integration of technology provides a beacon of hope. Through the adoption of inventive approaches, home health agencies cannot just withstand financial challenges but also elevate the overall quality and accessibility of care. The proactive adoption of technology aligns with the industry’s commitment to adapt, evolve, and continue providing vital services to those who depend on homecare. In navigating these fiscal uncertainties, it is essential to acknowledge technology as a powerful ally, securing the resilience and long-term sustainability of home care for generations of patients and caregivers to follow.

Photo: TimAbramowitz, Getty Images

Josh Klein is the CEO of Emerest, an innovative agency focused on specialized healthcare and home care solutions that services thousands of people across the United States. Josh takes care of business by taking care of people. As the care community’s most entrepreneurial visionary, Klein is on a mission to refocus the sector on the people that serve. That’s how has he successfully grown Emerest, Royal Care and U@PERKS.

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