How do family hospitals grow outside the country’s largest health system?

Despite the ongoing uncertainty around hospital reimbursement in the United States at the U.S., the model continues to expand but is not uniform. Major academic medical centers and large national systems are developing their programs, adding more virtual beds, and working with national suppliers to provide care at home. Meanwhile, regional health systems and medium-sized hospitals are still evaluating whether the model is financially feasible.

Most HAH programs today are led by top academic institutions and high-capacity systems with resources to absorb early losses and commit to long-term investments. This model does not work for every hospital. Most hospitals that are not major academic centers understand the value of providing care at home, but lack a viable entry point.

Cost is one of the biggest obstacles, especially the high prices of third-party suppliers that configure technology, logistics and staff as rigid, all-in-one packaging. But hospitals do not need to purchase the model to provide care at home. With the right tools and more flexible approaches, they can start small scales, master the process, and build programs that suit their scale, staffing and patient needs.

Economics behind the current model

Today, most HAH programs are built around third-party vendors that provide everything from remote monitoring devices to home clinical services and logistics. For large systems with support for 50 or more virtual beds, these costs can be recouped in years.

Regional hospitals may only require 10 beds or less. Moreover, when reimbursement does not match the patient volume, these hospitals may struggle to pay for the fixed costs of staffing, equipment and 24/7 care coordination, making it nearly impossible to maintain the program without losing money.

Policy uncertainty increases risks. Nearly 400 U.S. hospitals have started or planned to implement HAH programs in emergency hospital care for CMS. Although the exemption has been extended to September 2025, many have delayed the schedule longer. For most hospitals that require a plan to be built from scratch, short-term runways make long-term investments difficult to prove. Even with potential reimbursement extensions, years ago investments associated with the “white” delivery model can still prevent many hospitals from participating.

The role of the middleman increases costs

Research shows that HAH plans can save meaningful costs. Johns Hopkins' study found that the cost of providing emergency treatment at home can be reduced by 19% to 30% compared to traditional inpatient care. But these savings often depend on the size and capacity of fixed costs such as hospital management staffing, logistics and technical infrastructure.

Like any new care delivery model, HAH requires a significant upfront investment. Hospitals must implement remote monitoring technologies, establish logistics for home care delivery, and ensure proper staffing and clinical supervision. For regional systems without patient volumes to allocate these expenses, the financial model can be difficult to maintain.

Larger systems can overcome these costs and refine the model over time. Most hospitals have higher profit margins. In many cases, these bundled services lock hospitals in a strict framework that does not reflect their patient volume or clinical priorities. They end up paying for services that can be processed internally, or they don't need to.

Some leaders also raised concerns that suppliers priced at prices that match or even exceed the level of CMS repayment, leaving hospitals with small profit margins that could not afford the remaining infrastructure and staffing costs.

Instead of outsourcing each component, regional and medium-sized health systems can be used directly with HAH technology providers, starting with focused use cases, relying on internal resources, and building models that align with their clinical priorities and capacity. With the right tools, the HAH program does not need to be launched with 50 beds and national partners. It can start with five and grow in a way that suits hospital resources, staffing and patient populations.

Authorization through modular solutions

In order for HAH to work in hospitals outside of large academic systems, the model itself needs to be developed. Instead of relying entirely on third-party vendors, hospitals should be able to have more workflows, manage what they can internally and outsource only what they need. This shift begins with the right technical infrastructure.

Instead of adopting a bundled solution, hospitals can implement platforms that provide basic infrastructure such as remote patient monitoring, software integration and clinical data management, while maintaining control over staffing, scheduling and daily operations.

This reduces dependence on expensive service providers and creates more space for customization. It also lowers barriers to entry. Hospitals can start with a single use case, such as cardiac monitoring after releasing, and gradually expand into other areas such as respiratory care or behavioral health without having to redesign their entire program or committing to large-scale contracts from the outset.

Remark the path to scale

By 2025, up to $265 billion in health care may be transferred from traditional facilities to homes.

Although interest and opportunities are obvious, the pathways to sustainable HAH planning look different in regional systems. They don't need to replicate the size of a larger system to make it work properly. Smaller, more focused programs designed around their unique needs can provide strong clinical and operational value.

From there, growth may occur step by step. This could mean investing in flexible infrastructure, maintaining control over core workflows, and prioritizing models that offer more control than typical certain vendor arrangements. With the right foundation and intentional approach, regional health systems can establish a HAH program that operates within their capacity to support their staff and meet the needs of the patient community.

Photo: Ipuba, Getty Images

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