Amedisys Invests in Predictive Analytics Firm Medalogix to Drive Value-Based Strategy

Amedisys, Inc. (Nasdaq: AMED) has landed a minority stake in predictive analytics firm Medalogix.

As one of the largest independent home health, hospice and personal care companies in the country, Amedisys has been actively striving to establish arrangements and partnerships with managed care organizations. Its Medalogix investment, announced on Wednesday, will advance that goal by achieving greater patient insights and boosting the company’s data capabilities, points that are particularly appealing to payers, Paul Kusserow, president and CEO of Amedisys, told Home Health Care News.

“In order for us to move into where the world’s going to from a risk-based environment, we need to have the data,business intelligence [capabilities] at an individual patient level to drive better outcomes,” Kusserow said. “You have to be able to predict on a very regular basis who’s your highest risk and how you are going to alter your care plan so you can stop unnecessary hospitalizations.”


In addition to aligning Amedisys with payers and positioning the company for a value-based landscape, the investment means an eventual rollout of Medalogix products across the entire business.

Headquartered in Baton Rouge, Louisiana, with an executive office in Nashville, Tennessee, Amedisys has more than 17,900 employees who work across 420 care centers in 34 states and Washington, D.C. The company partners with more than 3,000 hospitals and 59,000 physicians nationwide.

Nashville, Tennessee-based Medalogix is a predictive analytics firm and data science company focused exclusively on the home health and hospice industries. Since its founding in 2012, Medalogix has launched its four main product lines of Bridge, Care, Nurture and Touch. All are tools aimed at decreasing unplanned hospitalizations and keeping patients in the appropriate care setting.


Amedisys’ investment will not restrict Medalogix from working with other providers or offering its products to competing home health and hospice providers, Elliott Wood, CEO of the data firm, told HHCN. Dallas-based AccentCare and Addison, Texas-based Elara Caring are among providers currently using Medalogix Bridge, a platform that helps identify patients nearing the final days of their life.

Medalogix works with 11 of the top 15 U.S. home health agencies in terms of size, according to the company.

“Medalogix is excited to partner with a company that has such national reach and extensive [managed care organization] experience and that also has an aligned vision for how providers and plans can work together in the future,” Wood said. “We believe, especially with everything happening related to the [Patient-Driven Groupings Model], our industry will have to evolve in the way providers approach plans, demonstrate value and enter into new types of payment models.”

Amedisys’ investment in Medalogix marks its first from a provider. With the investment, Amedisys is joining majority owner and institutional investor Coliseum Capital Management. All other investments have come from the company’s founder, Dan Hogan, a former home health owner and operator, along with his family and friends.

Amedisys declined to comment on the exact size of its investment.

Risk sharing and value-based care

While aligning Amedisys with Medalogix helps optimize the providers’ current business operations, it will simultaneously position the company to succeed in new and differentiated payment models, according to company leadership.

The Centers for Medicare & Medicaid Services (CMS) currently has a home health value-based purchasing model ongoing in nine states and has recently moved to fine-tune the demonstration for a possible nationwide expansion down the road.

“We think we’ll be able to provide lots of insights as a major user of [Medalogix],” Kusserow said. “We also think by owning a piece and by working very closely with Medalogix that we’ll be able to be more insightful, particularly as we look towards value-based work and risk-taking work.”

CMS is also opening the door for greater home health and, in particular, home care opportunities under the Medicare Advantage program.

Amedisys has been in discussions with payers regarding gain-share and risk-taking models, and has some projects in the works already, Kusserow said.

“We aren’t ready to talk about that specifically yet, but we have some meaningful things set up that will demand these types of skills and services,” he said.” That’s why we’re very eager to jump into this investment.”

Planning for a Medalogix rollout

Until now, Amedisys has not used any of Medalogix’ products, Nick Muscato, vice president of strategy and investor relations for the provider, told HHCN.

That will soon change.

“In parallel with this investment, we are working through an operational agreement to roll out the products,” Muscato said. “The current product suite — Nuture, Touch, Bridge and Care — all can be implemented today and will help us drive the most clinically distinct, clinically excellent care to our patients.”

Amedisys plans to use a majority of the Medalogix products, according to Muscato.

In one case study, the use of Medalogix Touch was shown to reduce overall re-hospitalization rates for patients from 20.1% to 13.6%, yielding an absolute risk reduction of 6.5%. Touch automates a home health clinical team’s touch points with patients and helps providers manage their most at-risk patients.

Medalogix Bridge, meanwhile, has been shown to achieve a more than 50% reduction of home health census deaths by helping to determine the right time for transitions to hospice.

“The analytical horsepower that they will bring to us with their predictive algorithms is really going to help us we move down the risk-taking path with Medicare Advantage organizations,” Muscato said.

While Amedisys has made several notable transactions related to directly expanding its caregiving services in the immediate future, its investment Medalogix is more of a long-term move designed to strengthen its broader capabilities.

It’s likely the type of deal that Amedisys — and its favorable balance sheet with ample cash on hand — will continue to pursue moving forward.

“We will be making investments ultimately that will all refer back to our home health business, but we’re in the mode now where we need to buy capabilities to enable us to distinguish ourselves more thoroughly, particularly in a value-based, risk-based environment,” Kusserow said. “We will be actively building, buying and joint venturing with companies that will give us tools to make us the first choice in this area.”

Written by Robert Holly

Companies featured in this article: