Care Advantage has worked to solidify its place in the home-based care space over the past three decades. Now, its latest mission puts value-based care square in its crosshairs.
Care Advantage offers a variety of services to patients across Virginia, Maryland, Washington, D.C., and Delaware. The Richmond, Virginia-based company cared for roughly 12,000 patients last year.
Already one of the largest in-home care companies in the Mid-Atlantic region, Care Advantage received an additional boost when private equity firm Searchlight Capital Partners purchased a majority stake in the company in June.
A prolific acquirer in its own right, Care Advantage completed numerous deals in the past few years, only slowing down during the onset of the COVID-19 emergency. Searchlight’s involvement in Care Advantage will allow the company to enter its next phase of growth.
Along the aforementioned value-based care lines, Care Advantage teamed up with Anthem last year to launch a pay-for-performance pilot program. The program zeroed in on Anthem’s sickest and frailest members.
To learn more, Home Health Care News caught up with Care Advantage CEO Tim Hanold for our latest episode of “Disrupt.” Highlights from the conversation are below, edited for length and clarity.
HHCN: Searchlight Capital Partners has acquired a majority stake in Care Advantage. What does this do for your company?
Hanold: We’ve been in business at Care Advantage for decades now, and so we’re going to continue that mission of care to serve the community.
Searchlight has worked successfully in partnership with leading corporate and family-owned businesses throughout the world, including a number in the health care sector, so this is right in their wheelhouse. They spent a lot of time researching and preparing for their next big investment in health care. This landed them squarely in the home. They recognize the need for high-quality home-based health care services and for all payer sources. This is obviously a need that was amplified during the pandemic. It’s just the lowest cost and preferred setting of choice.
What does that mean for us? It’s huge. It’s a host of things. There’s the obvious — significant financial support, a really strong balance sheet for us to expand and really magnify our effort. Just as important, it provides a platform of insights, analytics and things that we just couldn’t tap into in the past.
Normally, Care Advantage is the acquirer, but the pandemic disrupted M&A plans. Can you talk about this wrinkle, and have things turned around now?
Without question, it definitely slowed down our M&A effort in 2020 and early 2021. We spent a lot of our time and our energy looking inward to ensure we were creating a safe service delivery system for our families and care team.
Also, I believe for a number of our potential M&A targets, COVID created some variability for them in their financial outlooks and trends. I believe that things have started to smooth out a bit from that landscape. Over the past six months, we’ve ramped up the activity significantly and have a very active pipeline. I anticipate, especially now being part of Searchlight, a number of acquisitions ranging in size starting in Q4 of this year.
Last year, Care Advantage and Anthem kicked off an innovative pay-for-performance pilot program aimed at caring for Anthem’s long-term services and supports (LTSS) members. Can you talk about how the relationship between your two organizations came about?
As with any journey, it didn’t just happen overnight. It started with conversations with parts of the innovation team and this terrific continued partnership with the care coordination team, and the provider network teams. There are always a myriad of folks involved, … [and we] ensured that we were building trust and credibility all along the way.
It’s kind of funny. The first conversations felt a little bit like the seventh-grade dance. Everyone wanted to be on the dance floor, but it’s honestly not something where there are a lot of previous examples — personal care in value-based care.
From the get-go, we shared data. We were very transparent, put together an integrated care program that we called “Home Care Plus,” and then fed this consistent communication between our care teams.
This pilot program has been around since last year. What have been your main takeaways from this program?
We went into it with a partnership mentality. We were ready to test and learn, and we knew that the economics were going to come along with it.
For example, some of the things that we did: We took a hard look at our delivery system. By the way, when you do something like this, you have got to show up and make sure you have strong outcomes.
We looked at six key factors: environment, behavioral, psychosocial, function, biohealth and financial. We kind of fused that into the way that we were pulling our data together, and we stratified our shared membership with Anthem. This is that integrated care coordination.
The top 25% sickest and frailest was based on axes of number and severity of illnesses to functional behavioral and activity limitations. We call this our high-touch group, and challenges might include morbid obesity, [congestive heart failure], dementia, and certainly ADLs. We really focused and concentrated on that.
A key takeaway for us was that you can’t boil the ocean. Hone in on the population and membership that you can make the most immediate impact with for now. Both [of us] were looking at what will these results look like one year out. … We need to show progress immediately. This was a pay-for-performance program trending toward value-based care in general.
Another key learning was when you’re talking about human beings taking care of other human beings — be human. Early and often, infuse the stories and the anecdotes and what’s happening in that collective effort.
Value-based care is still relatively rare in the home-based care space. Can you talk about why that is and if you see that changing?
Home care is still on a journey toward being a legitimately respected part of the health care delivery system. It’s taking flight. It has taken serious steps over the past decade, but it’s still in development.
Key decision-makers, larger health care providers, and of course, our partners and payers, they’re doing more than just listening now. They’re taking action toward recognizing the home as the ideal setting for care. The data — or burden of proof, if you will — showing outcomes and indices of well-being and satisfaction are there. It’s more than a compelling story at this point, but something that can be essentially just fused into the underwriting. This is how large providers and payers can take care of their population in a smarter way.
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