Hospital-at-home movement gets boost from major healthcare merger

Two big players in the home healthcare world, DispatchHealth and Medically Home. announced plans to merge this week, creating the country’s largest provider of hospital-level care that can be delivered right in patients’ living rooms.

The deal, expected to be completed by mid-2025, comes at a critical moment for the healthcare industry as it grapples with rising costs, hospital capacity challenges, and growing evidence that many patients can receive equal or better care at home—often at a fraction of the cost.

“This merger unlocks a future where high-acuity care at home is the new standard,” said Dr. Mark Prather, co-founder and executive chair of DispatchHealth, in the announcement. “We’re combining decades of expertise to create a seamless, scalable model for hospital-level care at home—bringing the right care to the right place at the right time for more people.”

The economics of home-based hospital care

The business case for hospital-at-home programs has been building for years. According to research from the Commonwealth Fund, well-designed home-based hospital programs have demonstrated cost savings of 30 percent or more per admission compared to traditional inpatient care.

These savings come primarily from eliminating the fixed costs of operating brick-and-mortar facilities while potentially improving outcomes. Studies of the Johns Hopkins hospital-at-home model found not only significant cost reductions ($5,081 vs. $7,480 for traditional care) but also shorter average lengths of stay and dramatically lower rates of complications like delirium (9% vs. 24%).

The combined DispatchHealth-Medically Home organization will serve 50 major metropolitan areas, and partner with nearly 40 health systems and most major health plans. According to the announcement, the expanded capabilities could free up more than 62,000 hospital bed days annually, addressing capacity challenges while improving access to care.

A model with international success but U.S. roadblocks

While hospital-at-home programs have flourished internationally—particularly in countries with single-payer health systems—adoption in the U.S. has faced significant hurdles. In Victoria, Australia, for example, every metropolitan and regional hospital operates such a program, with about 6 percent of all hospital bed days provided at home.

The Commonwealth Fund research identifies several key barriers to U.S. adoption, including:

1. Payment policies: Medicare and most private insurers have historically limited reimbursement for home-based hospital care.
2. Physician resistance: Many doctors express concerns about patient safety and potential legal risks when treating acutely ill patients outside traditional hospital settings.
3. Hospital financial incentives: Chief financial officers worry about losing revenue from well-reimbursed inpatient stays.
4. Operational challenges: Delivering hospital-level care in homes requires specialized protocols, equipment, and staff training.

Technology and scale as game-changers

The DispatchHealth-Medically Home merger addresses many of these challenges through scale and technology integration. The combined entity will be positioned to deliver everything from same-day medical care for serious health concerns to complex hospital-level treatments in patients’ homes.

“We’ve proven the home can be an extension of the hospital while improving the quality of care,” said Jennifer Webster, CEO for DispatchHealth. “This merger brings together two complementary pioneers in hospital-level care at home, accelerating our ability to expand access, lower costs, drive value, and improve capacity for health systems across the country.”

Market Growth Potential

The hospital-at-home market is projected to reach $300 billion by 2028, according to data cited in the merger announcement. This growth is driven by improved patient outcomes, cost efficiency, and increasing patient preference for receiving care at home.

Since its founding in 2013, DispatchHealth reports treating more than 1.2 million people across 20 states, resulting in 58% emergency room avoidance and an 8.5% 30-day hospital readmission rate—metrics that suggest significant quality and cost advantages over traditional models.

Meanwhile, Medically Home has enabled care for more than 55,000 patients through its technology platform and clinical protocols.

Looking ahead: Implications for healthcare delivery

As healthcare continues to evolve toward value-based care models, the merger signals growing confidence in home-based acute care as a viable alternative to traditional hospitalization for appropriate patients.