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In an effort to diversify their businesses, and reach across the care continuum, some home-based care providers are electing to expand their services lines. Florida-based Empath Health is one example of a company making these moves.
Empath Health CEO Jonathan Fleece calls expanding access to care the backbone of the company.
“It was all about expanding access to help people during that advanced, serious, terminal, post-acute event in a greater and deeper way,” he said last week at the CONTINUUM conference in the Washington, D.C. area.
The Clearwater, Florida-based Empath Health offers hospice, home health care, palliative care, grief services, Program of All-Inclusive Care for the Elderly (PACE), adult day services, primary care services and more. It is the parent company of 17 affiliates and two philanthropic foundations.
Earlier this year, the company completed an affiliation process with Trustbridge, which formed the largest nonprofit post-acute provider organization in the state of Florida. West Palm Beach-based Trustbridge offers palliative care, hospice care, support services and more.
“We launched that expansion into where we feel like we’ve got our deepest core competencies, which is home-based care,” Fleece said. “Ultimately, that led us to the home health division, and then our complete care division. Soon we will be the largest PACE provider in the state of Florida, with probably about 1,000 participants.”
In some ways, diversification is a strategy to ensure Empath Health’s overall longevity as a company.
What’s more, Fleece believes that diversification is going to be essential to the company’s ability to thrive and grow in the future.
“One element that we sort of are also dancing around a little bit are the economics of this type of strategy through economies of scale, best practices, standardization,” he said. “I don’t think anyone in the room is ultimately predicting we’re going to get reimbursed a whole lot more over the next five to ten years. So what are the two ways to mitigate against that? Economies of scale, try to mitigate your administrative costs, back office costs, and try to, frankly, jump into the risk business. There’s the shared savings opportunity, and we want to try to also capture some of the value-based side of the revenue.”
Fleece noted that if Empath Health is effective in their efforts here, it will be a real economic opportunity for the company.
To build or buy — that is the question
When expanding into new services lines, providers must decide if its best for their company to achieve this through acquisition or building from scratch.
At Empath Health, the answer is all of the above.
“The various different ways of growth, whether it’s M&A, de novo, joint ventures, or collaboration — we’ve really done it all,” Fleece said. “We’ve had success in all categories, and we’ve also had challenges in all categories. I’m not sure that I would favor one over the other.”
Whenever the company launches a new service line through de novos, it conducts an extensive community needs assessment. This means engaging with focus groups to identify where gaps in care exist.
“When we’re entering into the market de novo, from a competitive perspective, we’re not trying to overlap or duplicate,” Fleece said. “We’re really trying to be really clear about addressing and filling gaps.”
In instances where Empath Health chooses the M&A route, it’s all about the organization’s people.
“It’s very important at the outfront to make sure that everybody believes in that common goal, and common vision for where we’re headed,” Fleece said.
When deciding whether or not to diversify a business further, Fleece urges providers to ask themselves these core questions.
“The core question — what does your organization do best today, and how can you build upon that?” Fleece said. “Adding to what you do best today is super important. Ask yourself that, and make that a journey, because you may get surprising answers.”
On its end, Empath Health is both learning from the past, while embracing forward-thinking solutions.
“Legacies are wonderful, and every organization has them, but legacies will also yield legacy thinking and can hold organizations back from transformational change, innovation and growth,” Fleece said. “I think some of our lessons have been, where are we going, why, and how do the organizations fit in?”
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