Why Elara Caring Sees Behavioral Health as a New Frontier in 2019

Managing chronically ill patient populations across years and becoming a go-to resource for behavioral health needs are among Elara Caring’s biggest priorities over the next several months.

Industry consolidation and increasing partnerships with large-scale payers and health systems will also be on the Addison, Texas-based provider’s radar, CEO G. Scott Herman told Home Health Care News.

Elara Caring — formed as a result of a three-way mega-merger between Michigan-based Great Lakes Caring, Connecticut-based National Home Health Care and Texas-based Jordan Health Services — serves more than 65,000 patients across 225 locations in 16 states. Its overarching mission, Herman said, is providing “the right care, at the right time, in the right place.”

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The company is under the private equity ownership of Blue Wolf Capital Partners and Kelso & Company.

HHCN checked in with Herman to talk about industry issues and his plans for Elara Caring in 2019. Highlights from that conversation are below, edited for length and clarity.

HHCN also recently spoke with Amedisys (Nasdaq: AMED) CEO Paul Kusserow and LHC Group (Nasdaq: LHCG) CEO Keith Myers about their top priorities for 2019.

HHCN: We’ll mostly look ahead, but I wanted to take a look back at Elara Caring’s 2018 briefly. It was the year the company first came together, rebranding to Elara Caring in July. How would you sum up these early months?

Herman: Industry-wide, 2018 was a big year for consolidation. There were some notable transactions, which, of course, includes the formation of Elara Caring. There’s this idea now that we can form companies that build continuums, and those continuums really begin to play into large-scale payers, capitated programs, integrated health care delivery systems.

What we saw in a couple of deals in 2018 — Elara Caring, LHC Group and some other moves — is that people are thinking about continuums beyond their typical legacy business and service lines. People are more often thinking about, “How do we manage patients across a more longitudinal value proposition?”

That’s something we’ve been doing for several years.

What are your areas of focus for 2019?

There are three key areas that I see as predictors. There’s going to be an increase in [home-based care] demand. Consolidation will continue. I think that one of the biggest market-movers coming this year will be the need for behavioral health as well.

I definitely think 2019 is going to be another big year for consolidation. The number of people seeking home services continues to grow steadily, as it has in previous years.

There’s a need for payers and large-scale networks to manage patients across a continuum in a more longitudinal format. The current cost structure for reimbursement just can’t support the growth of the senior population. The industry has the opportunity to really establish itself and bend the cost curve by enhancing clinical outcomes and establishing itself as a leader in the post-acute care space.

The industry can no longer rely just on its history of being a low-cost care setting. We have to leverage our data and continue to demonstrate significant movement in how and when care is delivered.

That’s why “right care, right time, right place” is our mission, vision [and] values statement.

The industry just has to refocus its efforts on not managing a patient in a 60-day episode, or just not managing a patient in the last six months of life. How do you manage chronically ill seniors with multiple medical conditions across years? Not days.

That’s going to take some realignment.

Do you think private equity is going to continue to play a major role in advancing M&A activity?

With the stake private equity has in the market today, we see it continuing to be a player in the consolidation and roll-up activity. Health plans are trying to control more and more of the health care continuum. They’re looking to have large home-based providers capable of providing care at multiple levels.

That’s kind of a new entrant in the market. You’re seeing activity with Humana Inc. (NYSE: HUM) and other big payers. We need to control more patients at various levels — and different types of patients — in their networks. That doesn’t mean just singularly focused on the elderly.

And all major plans are pushing Medicare Advantage (MA) today. Having a singular focus on skilled or end of life will limit provider appeal to payers and systems once consolidation occurs.

That’s why things like behavioral health are important.

What’s Elara Caring doing in terms of behavioral health?

Let me lay it out like this. Integrated models like Elara Caring are really the answers that collect and analyze larger caches of patient data. We then have the ability to intervene with clinical services, behavioral health being one of those.

… As it pertains to behavioral health, having the integrated and sophisticated models that identify where current patients are, you can do things like start working on current market trends that make the expansion of behavioral health a must going forward. The opioid crisis in America is a real epidemic.

At Elara Caring, we’ve demonstrated significant outcome improvements through home-based models that we’ve developed by understanding our people, processes and technology. We plan to expand out behavioral health offerings around opioids in the upcoming years.

We expect to see the same investment happen in the rest of the industry.

The thing about the opioid crisis is that it comes with other medical issues, so how do identify and carry those [appropriate interventions] out?

In 2019, we’re likely to see an expansion in the behavioral health space. Addiction is huge. In just the Elara Caring network, 40% of our behavioral health patients are now being seen for some sort of drug dependency.

I can tell you every major payer we sit down with says, “You have behavioral health? We’re very interested in building a program around that.”

Clinical trials have proven multiple times that the most effective and efficient manner to break opioid addiction is adherence to medication regimens. This is across a distribution of patients across all economic backgrounds. We have found ways to meet those patients where they need to be met, in a place that meets both their social and their health care concerns.

We engage those patients on medication compliance and treatment models of compliance, which also involves coordination of outpatient therapies and mental health professionals. Those mechanisms and comprehensive delivery systems … differentiate our model in the Connecticut market where we have the heaviest concentration of these patients.

You’ve mentioned longitudinal care a few times now. How long does the typical patient stay with Elara Caring?

We don’t just look at diagnosis as a mechanism for treatment. It’s really treating the patient holistically in a longitudinal way. Taking our thought process from an episode of care or a terminal life phase of care to, “How do we treat these chronically ill seniors over years?”

Our length of stay in our home- and community-based services population is about five years. We see them more than anybody else.

What points of friction to you expect in 2019?

Certainly, CMS is proposing some radical changes in reimbursement in the Medicare business.

We see — not pressure — but we do see some movement in state Medicaid systems. We monitor those, as those are disparate systems around the country.

We see challenges and friction around the inclusion of personal care services in Medicare Advantage — and very few plans understanding how to implement that.

We’re fortunate that we’ve been at this a while. We started pretty early in it. We’ve been at this continuum-based care, tracking outcomes for a while. We’re able to present functional data that separates us, differentiates us on reducing costs and enhancing outcomes. That means focusing heavily on 30-day, all-cause re-hospitalizations, emergency care.

But now we’re talking to payers about how our integrated “caretinuum” program, which is our continuum program, does things like increase length of stay by 800 days for patients, keeping them at home and engaged. If you’re a capitated payer in a [per-member per-month] arrangement, that perks your ears up.

We’re also talking about how we’ve reduced hospitalization rates on 30-day, all-cause re-hospitalizations to 7.5%, which is much lower compared to national averages among the chronically ill, how we’ve [been] reducing falls and injuries by 1,800 basis points compared to the national average.

It’s for all of these reasons that we created Elara Caring. You have to have skill and you have to have acumen. You have to have proven results. Elara Caring was formed in May of 2018, but it actually came from about 10 years of iterations across this space.

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