Another publicly traded company involved in home-based care is bullish on the Program of All-Inclusive Care for the Elderly (PACE) model and its ability to expand across the U.S.
That company is Moorestown, New Jersey-based Tabula Rasa HealthCare (Nasdaq: TRHC), a provider of data-driven technology solutions and an active stakeholder in the PACE market.
Specifically, Tabula Rasa HealthCare believes its value lies in helping home-based care agencies, PACE organizations and others improve patient outcomes, lower hospitalization rates and manage costs. Because of its focus on senior care and medication usage, in particular, it makes sense that Tabula Rasa views PACE expansion as an opportunity.
“We are excited about the future, to scale the PACE program exponentially to more Americans,” Orsula Knowlton, the president and co-founder of Tabula Rasa, said on the company’s Q1 earnings call Friday. “Tabula Rasa HealthCare is ready with its full suite of solutions to expand PACE for current clients, help new PACE organizations as they start and to support those interested in exploring and investing in PACE.”
Tabula Rasa hones in on medication usage because of how problematic it can be. Its technology is patient-centric, data-driven and built to mitigate the risks that come with medication usage among seniors, according to the company.
“With 4.3 billion prescriptions filled in the U.S. in 2014, medication treatment is the most common medical intervention,” Knowlton said. “Its imprecise use represents the fourth leading cause of death and contributes to an estimated 45 to 50 million adverse drug events annually. [That] results in more than 100,000 deaths annually, approximately 125,000 hospitalizations and one million emergency room visits.”
On its end, PACE provides comprehensive medical and social services to seniors in communities across the U.S. Nearly 140 PACE programs currently serve around 55,000 patients across 30 states, according to the National PACE Association.
PACE has been touted as one of the most successful alternatives to nursing home care, a point highlighted during the pandemic because of the struggles facilities have faced with COVID-19.
An additional tailwind for PACE — and companies working within it — is that over 2 million Americans qualify for the program. Not many, however, currently take advantage of it. In fact, the PACE penetration rate is about 3%, according to Tabula Rasa.
“PACE should be considered the solution for aging in place and long-term care in the U.S., as opposed to facility-based care,” Knowlton said.
While PACE operators took a hit during the pandemic, Tabula Rasa says its PACE census has returned to a pre-COVID level of growth — or even gotten a bit better.
“The first four months of 2021 have been extremely active and encouraging from the federal policy perspective, as the new administration has placed an emphasis on seniors aging in place,” Knowlton said. “This of course was in response to the high death rates in the nursing home population.”
The legislation that Tabula Rasa cited as potential tailwinds in its earnings call included the American Rescue Plan, which comes with a 10% increase to the Federal Medicaid Assistance percentage (FMAP) for home- and community-based services (HCBS). The company also pointed to the HCBS Access Act of 2021, which was introduced in March and included HCBS as a mandatory Medicaid service.
The American Jobs Plan, which would provide $400 billion for HCBS and workers, as well as the PACE Plus Act are likewise positives.
“The PACE Plus Act would strengthen and expand access to the program and help release pressure on the growing Medicaid HCBS waitlist,” Knowlton said.
Founded in 2009, Tabula Rasa is an example of a third-party company that could enable home-based care providers to connect with more payers, and help reduce health care costs among members in the process.
The company’s total revenue for Q1 was $76.7 million, a 5% increase from the 72.8 million it brought in over the same period last year.
COVID-19 uncertainty waning should help financially as well. PACE centers reopening has been a major positive for the company of late, Tabula Rasa CFO Brian Adams said on the call.
“First, as we have been disclosing throughout the year, PACE enrollment has continued to improve each month as more participants get vaccinated and PACE centers begin to reopen,” Adams said. “In addition, PACE operators have adapted well to serving more people in their homes since the pandemic began and are now shifting their focus to growth.”
InnovAge — the most dominant PACE provider — recently went public through a $350 million initial public offering (IPO). Its aspirational future outlook is also a testament to the sense that PACE could be a place of opportunity in the near future.
Denver-based InnovAge also relied heavily on home-based care during COVID-19, which enabled it to get through the pandemic while still caring for PACE members, InnovAge CEO Maureen Hewitt told Home Health Care News in March.
“We’re really just focused on the growth of the program, both on a state and national level,” Hewitt said. “And also looking at the number of seniors that are available to come into the program.”
Companies featured in this article:
Programs for All-Inclusive Care for the Elderly (PACE), Tabula Rasa HealthCare
