Lean Helps Improve Performance in Home Health

Vinnie Polito – Director, Consulting Services, Lean Advisors, Inc.


Overview of Home Health Services, an Industry on the Rise

Home health care is a wide range of health care services that are provided in the patient’s home. Home health care is usually less expensive, more convenient, and just as effective as care you get in a hospital or skilled nursing facility (SNF).

Home Health services are Medicare-certified and include short-term nursing, rehabilitative, therapeutic, and assistive home health care. Home Health services help adults and seniors who are recovering after a hospital or facility stay, or need additional support to remain safely at home and avoid unnecessary hospitalization. Currently Home Health services over 12 million patients and conducts close to 500 million patient visits annually. Industry revenue is closing in on $100 billion and there are 33,000 companies providing home health, hospice and home care services

According to the Centers for Medicare and Medicaid Services, the overall cost of home healthcare is lower than that of inpatient facilities, but the home healthcare industry is driven by many of the same pressures that are increasing demand throughout healthcare. Healthcare is looking to relieve costs by moving patients to home health services more and more. Home healthcare is an important answer to these challenges, but Home Health is experiencing its own performance issues and struggling to satisfy the needs and expectations of patients and communities they service.


Background on Baystate Visiting Nurse Association

Baystate Visiting Nurse Association is a home health provider owned by Baystate Health System. It has a staff of 200 with 160 clinical providers and 40 providing administrative support. They have a census of around 800 and with revenues of close to $23 million. Unfortunately, like many home health providers they are working in the red. Annual Home Health visits exceed 190,000 and each visit is losing money. Typical of healthcare, labor is the biggest portion of the cost (75%), census continues to expand and Baystate Health System is insisting that Baystate VNA provide more capacity. For a home health provider this is a perfect storm, increasingly losing money as the demand increases.


Challenges Faced by BVNAH

  • BVNAH operating margin would not support a reinvestment for the agency. In order to reinforce human resources needs, planned growth and meet Baystate Hospital expectations BVNAH must achieve a 3% operation margin, and reduce cost/visit and cost/hospice day.
  • Referral management, patient scheduling accuracy and initiation of service was erratic and inconsistent causing missed, uncovered and “empty” visits. Referral Conversion was only 80%.
  • HHCAP scores were low and patient surveys indicate that only 24% of patients were willing to recommend BVNAH.
  • BVNSH staff was not being used efficiently and did not consistently demonstrate the talent and skills needed to provide care to an ever-expanding patient population.


Actions Taken

Phase 1 – Lean Assessment

The Baystate Health System already had been using Lean to make improvements in hospital and physician practice operations so the VNA leadership decided to give Lean a try. The first activity was a Lean assessment. This included a two-day leadership retreat where basic Lean awareness training was presented, and where there were group and individual interviews. In preparation for the session all pertinent business metrics were collected and presented.

Phase 2 – Enterprise Value Stream Mapping

The next activity we completed was an Enterprise Value Stream Analysis to confirm the above challenges and KPI data.

Leaders in the organization, feeling the pressure of the failing VNA, had pre-determined where and what needed to be “fixed” and they were insistent that those point solutions be addressed. After much discussion they finally agreed to let Lean help get things organized and corrected.

Phase 3 – Future State Plan and Implementation

During the EVSM we developed a future state vision and a comprehensive implementation plan to be completed within the next 6 months. The plan was developed with the need to:

  • Reduce information errors (missing, incorrect, timeliness) directly caused missed visits, uncovered visits
  • Define and documented standard processes for receiving, evaluating and accepting referrals from Baystate Hospital.  (40% of Referral information is incorrect/incomplete at Intake.)
  • Develop a “Model Team” where Clinical Manager/TA are dedicated to more effectively assign clinical resources and improve patient continuity of care.


Specific event goals included:

  • Decrease OT by 50%
  • Increase Margin to 4%
  • Reduce cost per visit for Home Care by 5%
  • Reduce Cost Per Day Hospice 5%
  • Improve overall productivity from ~70% to +85%
  • Admit100% of all referred patients within 48 hours
  • 100% Multi-Discipline Evaluations completed with 72 hours
  • HHCAP –all 10 indicators at/above 90 percentile (become Home Health Elite)
  • 17% Readmission Rate (from current 18%)



A series of six Kaizen event charters were defined and documented. Over the next several months these events were conducted as well as a number of “JDI”s. After the first pass through the Baystate Home Health value stream the results were excellent.

Lean helped increase revenue by 3% while improving the margin by 2%. Cost per visit was reduced by 3% and provider productivity improved an astonishing 10%. Overtime was reduced by 50%, while expected year over year savings exceeded $900,000.