Earlier this year, Chip Measells became co-owner and CEO of Stowell Associates — a Milwaukee-based company that he describes as a “unicorn” due to its particular way of blending care management and home care services.
This is just the latest career turn for Measells, who has a background in investment banking and as a health care entrepreneur. Having advised scores of home health companies on transactions while at Wyatt Matas — a boutique investment banking firm that he founded — he had a clear idea of what type of company he was looking to invest in and lead himself.
Stowell fits the bill in several regards, including the value proposition that the organization brings to an increasingly value-based health care system. He believes that providers like Stowell have potential opportunities to play a larger role in Medicare Advantage plans — but providers need to be wary or the MA opportunity could become a race to the bottom.
Below are some highlights of Measells’ comments on the podcast, edited for length and clarity:
Why did you decide to move on from Wyatt Matas to Stowell?
We did a lot of transactions [at Wyatt Matas], a lot of deal-slinging work that I didn’t find all that fascinating. It was more project management, transactional kind of relationships that just weren’t a lot of interest to me … I really realized that I needed to go acquire a company to satisfy my strategic itch.
I had a couple of white papers I had been working on, one in home care, and I took that home care paper and distributed it as widely as I could through the industry.
I looked at a bunch of companies and couldn’t find anything that was my size. I was looking around the $10 million mark, and they may have been that size, but I didn’t feel like I had a good fit with the culture.
There was so little differentiation in a really crowded market that I thought it was too much of a business risk. And so, I had almost given up when Phyllis Brostoff, the owner of Stowell Associates, called me. [She had] read the white paper and she said, “Your white paper is what our company is, so it’s worth coming to take a look.”
We initially met in Washington, D.C., then eventually in Milwaukee, where the business is based. It was really just a perfect match for me and I think a good match for Phyllis and Valerie Stefanich, who was her partner.
What is the Stowell model?
What Stowell built — and it really started this way 35 years ago — was [based on] the theory that Phyllis and Valerie had. It was, if you are going to be in the home care business, it had to have professional oversight in the home along with the caregiver. Over time we have kind of evolved into having masters-level social workers and nurses as our care managers.
So, how that manifests itself is folks come to us because there is an acute event and they are asking the questions — what now? Our care managers go in, stabilize the situation that they have there, and then, over time, we will supplement with home care, if it’s needed. Our clients tend to be very complex, but they — and this is kind of the differentiator — [the care managers are] also proactively supervising the caregivers that are in the home with specialty training, conflict resolution, setting expectations for the client and the caregiver in order to make that relationship work.
And that shows up in so many different, better metrics as compared to our industry, whether it’s turnover rate — which is 75% below the industry — or that our clients stay three times longer than the industry. And both of those things have a tremendous impact on a stable business that is able to scale, rather than constantly trying to manage your turnover rate or constantly having to address your turnover.
It is all because our professional care managers are involved. They are able to extend the culture from our office into the home and make sure the caregiver feels recognized and feels like they are being heard and is a part of the team.
It sounds like large managed care organizations or payers like Medicare Advantage might love to work with a company like Stowell, that can take on that care management piece and conceivably keep costs down over a post-acute episode?
Certainly, [given] what we do with these complex patients, that at-risk organization is going to look at that for a segment of their population and say, “You could really solve our challenges around this set of patients.”
And whether that’s a disease stage or geography, I am not sure. I think the challenge for us — and others like us that have a more innovative model — is: Can we communicate clearly enough that we are not just another home care company, and we are not willing to compete over a home care dollar? Can we get the point across that we have a very differentiated model because of the care management? And you should look at us as a care management company rather than just a home care company.
That’s a real challenge, when at least for a hospital … very few people may be able to pay for our services, [and there’s] not been a whole lot of evidence that hospitals have a tolerance to pay for what we do.
We’ve had some good conversations. They look at our data and they look at what we do and they go, “Wow.” But, we wouldn’t be very high on their priority list right now and we really haven’t tried to be. We’ve kind of stayed internally focused as we get ready to grow the business. Certainly, your point is valid and it something on our radar to think harder about.
What’s your take on Medicare Advantage changes, allowing non-skilled in-home care as a benefit starting next year?
It’s exciting for the industry, to open up another revenue stream for what we already do. I think those that are best positioned to take advantage of it are those that have relationships with Medicare Advantage … There are a lot of upsides to it.
I think probably as an industry we have to be a bit careful about, if we are going to go compete over a home care dollar and have a utilization discussion on every patient, then it makes it really hard to stay viable. It seems like it is a race to the bottom.
Written by Tim Mullaney