Home Healthcare 2.0

In the wake of the continuing convergence of the technology and healthcare industries, many traditional healthcare providers will be undergoing a transition to modernity. One sector to pay particular attention to is home healthcare. As a result of government legislation and private sector innovation, a growing trend can be seen with digital healthcare solutions being integrated into the day-to-day functions of home healthcare companies.

In an effort to improve patient outcomes, reduce emergency room admissions and to cut down on healthcare costs for providers, payers and patients, government legislation, such as the CHRONIC Care Act of 2017, aim to incentivize home healthcare providers to incorporate telehealth and remote patient monitoring services into their business offering.

While this is an incremental step in the right direction, rather than a complete adoption, Centers for Medicare and Medicaid Services (CMS) will need to further loosen restrictions on where telehealth and telemedicine programs can be run and how providers are reimbursed in order for the new paradigm to be fully embraced. As a result, lobbying efforts are underway for CMS to adopt several new billing codes, with the goal of expanding coverage for unbundled remote monitoring services.

"The redesign of the home health payment system encourages value over volume and removes incentives to provide unnecessary care"

Seema Verma, CMS Administrator 

Now that the aging population in the United States is more technologically astute than ever before, seniors are keen on living out their golden years in the comfort of their own homes. The assistance of dedicated care providers, as well as the use of connected care technology, seniors’ homes can essentially be transformed into “smart homes”. Devices such as Amazon Alexa and Google Home serve the purpose of providing daily health and wellness updates, along with medication reminders - in effect reducing the need for the care team to focus on menial tasks.

Additionally, wearable items such as clothing, belts, socks and shoes are now being fitted with sensor embedded technology to monitor seniors in their homes. One example of this wearable technology is Hip’ Air by Helite. Hip’ Air  is a belt with motion sensors that can detect when the wearer is about to fall, then deploys a set of airbags on either side of the body within 0.2 seconds. The purpose of this device is to mitigate the damage to a senior’s body as a result of a fall, which according to a report published by the CDC, is the leading cause of injury and death for older Americans. For quantification, 29 million falls were reported in 2014, totalling over $30 billion in Medicare costs.

With the adoption of digital services, home healthcare companies will start to experience a wider-range of risks, which alter from those experienced under the traditional model of in-person patient care. This will result in  a more complex claims deliberation process in regards to the proximate causation of the loss. In the past it would be fairly simple to point to a specific instance of employee or managerial negligence, however the integration of digital healthcare solutions might leave claims handlers blaming device manufacturers or patient monitor call centers to avoid paying claims if the scenario did not categorically arise from a “healthcare activity”.

To illustrate this point, consider the services provided by remote patient monitoring devices. An elderly patient living independently had been given a remote patient monitoring bracelet. The bracelet is designed to alert the emergency services in case of a fall or heart arrhythmia. Upon entering the shower, the patient fell and fractured both arms. The device, which was monitored by an in-house call center failed to detect the fall, however the arrhythmia monitor notified the call center who rang and connected to her device. The call center tried speaking to the patient, but the shower environment meant they were unable to establish communication so the call center assumed the patient was not in an emergency situation. Due to the device failure, the patient died from deep dermal burns from the shower’s scalding hot water after being unable to move or contact anyone for help.

What is the solution to navigating the complex risk exposures being presented by evolving healthcare companies? Quite simply a robust policy form which offers blended coverage for Professional Liability, Technology Errors & Omissions and Cyber and Privacy liability, and provides affirmative bodily injury coverage arising from multiple triggers. In the case of the home healthcare companies of today and the future, this would be healthcare services, technology activities and cyber events. In order for brokers to avoid a potential E&O, it is imperative to be cognisant of the complex exposures when placing coverage for traditional healthcare providers who are adopting digital healthcare technologies, as well as having suitable markets who are uniquely positioned to absorb the totality of this new and emerging exposure.