The U.S. health care system has rapidly accelerated away from hospitals, nursing homes and brick-and-mortar facilities over the past year. As a result, more attention and resources have been given to home-based care organizations, a trend that will likely continue in 2021.
But that isn’t entirely guaranteed, according to CareCentrix CEO John Driscoll.
Hospitals and institutional settings — sometimes seen as “the Empire” of the health care universe, to borrow from “Star Wars” — carry a lot of clout in Washington, D.C. Once the COVID-19 pandemic is over, that Empire may want to strike back.
Hartford, Connecticut-based CareCentrix is a health-at-home solutions company that manages care for 26 million members through a network of more than 8,000 locations in over 25 states. While CareCentrix currently does about $2 billion in annual revenues, the PE-backed company has its sights set on even more growth in the year ahead.
For our latest episode of “Disrupt,” Home Health Care News caught up with Driscoll to learn more about the shift to home-based care, CareCentrix’s growth plans and other health care trends for 2021. Highlights from HHCN’s conversation with Driscoll are below, edited for length and clarity.
HHCN: How does CareCentrix fit into this shift toward home-based care that we’ve seen?
Driscoll: CareCentrix is one of the leading care-at-home providers to health plans that help patients heal and age at home. We have a broad portfolio of home health, DME and infusion networks. We have doctors, nurses and other health care professionals across the country.
Today, we serve Medicare, Medicaid and commercial populations. We’re starting to work largely with health plans. That’s where the dollars are. We’re increasingly working in palliative care, plus our post-acute risk business in Medicare and Medicaid, with hospitals and doctors who own risk themselves. We leverage technology and analytics for all of the things patients have to manage post-discharge. Our No. 1 goal is to enable more healthy days at home.
I think for all of us who are involved and interested in care at home, we’re just in the second inning of what we can accomplish.
It feels like the conversation of “the shift to home is coming” is over. That shift has taken place, so now it’s about accelerating what can be done in the home.
I think that’s absolutely true. We did some research last year. We were shocked to see that nearly 75% of all patients prefer to recover at home. Another 70% want their follow-up appointments and check-ins with their doctors and nurses to be at home. There has been a profound shift, for sure.
Consumers have historically put up with, frankly, a lot of nonsense in terms of wait times and scheduling. They’ve put up with a lot, in having to go to hospitals and nursing homes, which are increasingly dangerous. That danger has been vividly illustrated with COVID-19 statistics. But a hospital visit is one of the leading causes of death in America. The combination of technology and telemedicine is going to allow for an expansion of the number of things that can happen digitally and in-person in the home.
You touched on this briefly a second ago: Is palliative care something you’re able to do as a result of the Turn-Key Health acquisition?
Exactly. Turn-Key is just a pristine asset. It was the best palliative and end-of-life care provider that was really focused on making sure folks could get more of those services at home and in the community. We were fortunate enough to be able to acquire Turn-Key last year. We’re integrating the business now so there’s a seamless set of services for patients, whether they’re recovering from the hospital, whether they’re trying to avoid going to a nursing home, whether they’re getting rehab at home, whether they’ve got pain-management issues. We’re really excited about that asset.
What’s in store for CareCentrix in the coming 12 months?
We’re trying to take advantage of this one-time tectonic shift for providers and patients by expanding the possibility of what can happen at home. We’re expanding it by making investments in remote patient monitoring. We’re taking on more risk around avoiding the hospital and the nursing home. We’re working with health plans to deliver more services. I think for individuals looking to thrive and stay independent, we are in a golden age.
One of the things that’s profoundly depressing about health care is it disables and, in some cases, infantilizes the patient or family. With my own 87-year-old mother, it’s a real challenge to stay in control of her care, even with our access to some great doctors. We can show that, at home, it’s not just a cost-saver or a safer setting. We can show that the home can also support independence and a sense of “taking control over your life,” which also leads to better health outcomes by supporting accountability.
At CareCentrix over the next 12 months, we want to be bringing on more plans in Medicare, Medicaid and commercial. You’re going to see a significant shift of our post-acute services into the Medicaid as well as the Medicare area. You’re also going to see us provide modular options. As hospitals and physicians get involved with direct-contracting, as hospitals increasingly start to convert their fee for service panels to manage care, we will be providing services so that they can have more home-based care opportunities.
We’ve seen a lot of changes happen in the home-based care world. They include, for example, the new CMS hospital-at-home waiver. What else do you see coming down the pike in 2021?
We’re seeing a digitalization and miniaturization of monitoring devices as well as assessment devices. We’re seeing a dramatic drop in costs for remote patient monitoring technologies, with an increasing amount of bandwidth and information being fed back into systems. I think there’s an accelerating intelligence being provided at home, through care at home. Providers are going to leverage it and have more visibility into what happens to patients after discharge.
We’re going to see more of a focus on social determinants of health, though I don’t love that phrase.
That’s a phrase we write out in a lot of our stories these days. I agree that it’s kind of a mouthful and too technical. It seems like we should just say “all of the things that matter to a person’s health.”
Realistically, it’s everything that matters that health care hasn’t historically been willing to pay for. I mean, that’s really the only reason we came up with a complicated name like “social determinants of health” — so someone could find a way to pay for it.
At CareCentrix, we’ve been providing transportation where it wasn’t available. We’ve been integrating people into food services. We’ve been making sure we’re addressing the social-behavioral issues. We’re leveraging pharmacists to actually do that reconciliation of pharmacy. We didn’t do it because there was a new reimbursement mechanism. It was one of the most important ways that we could actually address how to help people heal and thrive at home. I think “social determinants of health” is a phrase that only an economist or a billing person would like.
Let’s stay on this topic of payment for a second. Last time we spoke, we talked about how payers want home-based care more than ever. They recognize the value. They’re willing to pay for it. How is that something you’ve seen directly at CareCentrix?
Going back to that research we did, We found that nearly 90% of health plans wanted to do more care at home. But nearly the same amount said they do not feel prepared to do it themselves. They want partners because they’re not quite sure how they’re going to get there.
It’s an incredible opportunity for folks like CareCentrix, for some of our competitors, for sophisticated home health agencies, for doctors that want to extend their practices into the home. Health plans are looking for partners. And those partnerships will not be provided off of the traditional “transaction function, by transaction function.” There has to be an integrating agent that takes the risk from the health plan, so you can control the dollars to shift more of them to the home. There needs to be an entity like a CareCentrix that can provide that care traffic control. We spent, you know, $10 million to $20 million building analytics engines — and we’re still investing in that so we can predict what’s going to happen next, then provide that information back to providers or to members and caregivers.
The big takeaway is everybody wants in-home care from a health plan perspective, but plans don’t know how they’re going to get there.
What do you think is going to be the next big source of disruption for home health and home care? More PE or VC money coming into the space? Somebody like Amazon or Google more aggressively getting into home-based health care?
Well, I think disruption is going to come from the non-traditional providers. I don’t believe new solutions come from incumbents. There’s a lot of great things that happen at hospitals, nursing homes, rehab facilities, what have you, but too much care is still anchored in those institutions. We’ve got to look elsewhere for the disruptors.
I think from a VC perspective, there’s a lot of interest in things like remote patient monitoring and the wiring of the information flow back to the home. PE can be a positive force. We’ve had good PE partners at CareCentrix. You’ve seen some other great investments in trying to sort of turn or augment some of the current players.
True disruption is going to be driven by that deepening web of information that’s available to us and to everyone else. We’re all wired. We’re going to have more visibility into what’s going in the home than we currently have in the hospital today. Imagine that.
Is there a development or trend that emerged last year that you think is ultimately going to phase out? Or revert to normal?
You never want to bet against the empire of institutional health care providers. I mean, the reason why health care costs go up every year, the reason why we have the most expensive health care system in the world with some of the weakest outcomes is because the incumbents are really good at fighting for their position. So, “the Empire” will strike back. There’s no question you’re going to see hospitals and doctors pull people back into hospitals, nursing homes and doctors’ offices. There’s a strong economic incentive for them.
At the same time, patients and families want better care. They want different care. They want alternatives. You’re also seeing the bipartisan, aggressive support for value-based care. You can see that specifically with end-stage renal disease (ESRD), for example. So while the Empire will strike back, I think there will continue to be a natural pull away from those higher-cost settings.