During an earnings call on Nov. 3, Amedisys Inc. (Nasdaq: AMED) leaders defended the company’s acquisition of hospital-at-home enabler Contessa Health. They also teased “substantial” deals for the company coming down the pike.
A week later, Contessa announced that it had partnered with Penn State Health, which has a footprint that spans across 29 counties in Pennsylvania.
“Home Recovery Care is a natural extension of Penn State Health’s mission to continually improve the health and well-being of its patients,” Contessa CEO Travis Messina said in a press release announcing the partnership. “This model personalizes care for acute and chronic conditions, while lowering costs and increasing patient satisfaction.”
The health system also announced a partnership with Highmark Health.
Together, Penn State Health and Contessa will be operating a new venture dubbed “Penn State Health Home Recovery Care,” which is one of the first home-based care-related moves that the health system has made.
The model will include hospital care at home in addition to skilled nursing care at home, according to the two organizations.
“Health care is evolving, and Home Recovery Care is on the cutting edge of innovation and patient-centered care,” Chris LaCoe, the vice president of virtual care for Penn State Health, said in the press release. “Partnering with Highmark Health and Contessa to bring this new at-home option empowers patients to take control of their health, while decreasing costs, increasing outcomes and enhancing comfort and convenience.”
Based in Nashville, Tennessee, Contessa Health is one of the pioneers of at-home, high-acuity care delivery. In addition to Penn State Health, its partners include Mount Sinai Health System, Henry Ford Health System, Marshfield Clinic Health System, Ascension Saint Thomas, CommonSpirit Health and Highmark Health, among others.
Amedisys acquired the company at the end of June for a purchase price of $250 million.
On its end, the Baton Rouge, Louisiana-based Amedisys is one of the largest home health providers in the U.S. It also provides personal care and hospice services, delivering care to over 418,000 patients per year through 514 care centers in 39 states and the District of Columbia.
Amedisys also said on its Q3 earnings call that more than a dozen health systems are also in talks to partner with the hospital-at-home enabler, which could “double its footprint.”
For now, Amedisys is experiencing some near-term drag related to the Contessa deal. But at this point, that’s not something that Amedisys leaders are concerned about.
“We want to win new business, particularly near our footprint. So I think that’s what we’re looking for,” Amedisys Chairman and CEO Paul Kusserow said during the Credit Suisse Healthcare Conference this week. “But the incremental growth in terms of new clients, a lot of it depends on what it may be – if it’s SNF-at-home, if it’s palliative or hospital-at-home. But we’re anticipating it’ll be hospital-at-home, so we should start to see some of the scale kick in.”
Kusserow did say that Amedisys expects Contessa to be a positive profit contributor by 2023.
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