Frontpoint Health Wants To Change Home Health Care’s ‘Subservient Relationship’ With Payers

When it comes to the larger health care industry, home health care is no longer the little kid on the playground. It’s all grown up.

The leaders at Frontpoint Health — a somewhat new home health agency — are banking on this growth spurt, and home health care’s overall value, to gain leverage in relationships with payers.

This is especially important to Frontpoint because the company is leaning into Medicare Advantage (MA) opportunities. The idea behind the company’s strategy is to not rely on Medicare fee for service for the bulk of its revenue.

“There is a subservient relationship between U.S. health insurance and providers,” Frontpoint Health CEO Brent Korte said during the latest episode of HHCN+ TALKS.

Frontpoint is looking to change this dynamic in a significant way.

Korte was joined on this episode by Molly McDonald, the company’s vice president of compliance and quality improvement. Korte and McDonald are both veterans of the Washington-based EvergreenHealth Home Care.

The recording and transcript of the conversation with Korte and McDonald are below.

Read on to learn more about:

– How Frontpoint hopes to hold payers accountable in MA partnerships

– The challenges and rewards of embarking on a new home health venture

– How Frontpoint hopes to expand in the future

Andrew Donlan: Hello, everyone, and welcome to another edition of HHCN+ TALKS. Very excited for this one. We have two guests today. We have Brent Korte and Molly McDonald of the new company, Frontpoint Health. We’re going to get a lot into the new business model that you guys are embarking on with Medicare Advantage, and a lot of other fun home health topics. First, Brent and Molly, I want to start with your background. Brent, I’m sure some of our readers are familiar with you, Molly, maybe you a little bit less. Brent, we can start with you, and your career up to this point, and then Molly we’ll go to you.

Brent Korte: Yes, great. Appreciate the opportunity to join Andrew. Again, [I’m] Brent Korte, I’ve worked in the home health and hospice industry since 2001. Worked primarily early on in pediatric nursing and in hospice, and in the time between I’ve run seven different agencies from super small to what I would say is relatively large. I had a moment in the middle of my career where my wife and I actually left our careers for a period of time and went and traveled overseas for a year and a half, which was probably my greatest education.

Certainly a very hospice-centric and people-centric education, came back after the great recession from a long trip around the world and dove deeply into home health, and more deeply into hospice. I started at EvergreenHealth at the end of 2013 – EvergreenHealth in the Kirkland, Washington, Seattle area, and was part of the operations. [I eventually ran] operations for the home care division for eight plus years, and have recently separated from that role and started an exciting new role as CEO of Frontpoint Health. We are joining today from Dallas, it’s somewhat rainy, so it feels like home. It feels like Seattle.

Donlan: Fantastic. Molly, would you mind giving us your full title too, because I know it’s a bit of a long one, if I can remember correctly.

Molly McDonald: Sure. I’m Molly McDonald and I am the current VP of Quality and Compliance for Frontpoint Health. I’m a physical therapist by trade. I’ve been in the home health industry for almost 15 years. I also was at Evergreen in Kirkland in the Seattle, Washington area. I was a traveling physical therapist for a long time. I settled at Evergreen, and I started in the field and found my way to quality and compliance, probably about nine years ago and that’s where I’ve been ever since. I’m super excited to have this new opportunity and be here.

Donlan: Molly, was it a difficult decision for you to make the move at this point in your career, or was it something of a no-brainer for you?

McDonald: I think yes and no — both, no-brainer and difficult. We had a great team at Evergreen and we built some great stuff. Leaving that was difficult but the opportunity we have here is really great as well and so it’s exciting, busy and crazy in its own right, but in a really exciting way.

Donlan: Let’s talk about the opportunity — Frontpoint Health. Explain the ethos behind it and what you guys are trying to do.

Korte: Yes, great. Frontpoint Health, the ethos behind it — I love the way you asked that question Andrew. We want to approach home health and hospice in a different way. Home health in particular. I would say actually home health and hospice, both in their own rights, probably the best way to explain it. The sky is blue comment out there is this, we know that everyone wants Medicare and many home health providers are out there seeking Medicare patients, and we also know — I keep using this fruit on the tree metaphor, so I’ll run with it today, that eventually the Medicare fruit on the tree is going to stop growing off the tree. We’re going to have to find another tree with different fruit and learn how to peel it differently.

I’m still quite surprised at how many providers are basing their entire business models on a group of patients that will effectively not be there, or at least be there in such small numbers in the future that it certainly wouldn’t sustain a business. It’s odd, but the home health industry may be careening towards the middle of the bell curve being boutique providers going for the highest paying patients and that doesn’t really solve everything from social determinants of health issues to community-based care issues, to really, how do we keep patients out of the hospital if we’re all trying to compete for the same Medicare patients.

We are building an organization with everything from a cost structure to a system of communication, which is what Molly and I were just talking about with some of our leaders here. The truth is, we’ve got a lot of work to do and a data-driven organization that will allow us to provide care to Med Advantage patients in a way that provides value, most importantly to our clinicians. We take care of our clinicians, our clinicians take care of our patients.

It’s something like clinician, patient, health system or community health system payer. We want to be providing value to each of those groups by virtue of providing access. The unique aspect of Frontpoint Health as we evolve and grow, and we continue on this journey, is not that we’re going to be focusing on Med Advantage patients, it’s that we’re going to be focusing on access. The access problem, and I would say the timeliness problem, are really at the core of home health’s greatest problem.

One could say [home health’s greatest problem is] staffing. Well, staffing isn’t really the problem, the problem is the fact that not having enough staff creates an access and a timeliness issue. At the center of the onion are those issues, and we are working very hard to try to solve those problems. We partnered with our first organization here in North Texas and the Dallas-Fort Worth metroplex, mainly because the group that we’ve partnered with has found a way to provide value and take care of patients. Our payer mix is strongly bent towards Med Advantage, and they found a way to do it in a way that not only takes good care of our patients, but is financially productive as well.

Are we going to take this model nationwide? No, because health care, and I think we’ve talked a little bit about this, is very community-based. DFW, for those of you that haven’t been here, you can drive from the east side, Louisiana side of Dallas, Fort Worth and keep driving for about two hours and still be in the city at 65, 70 miles an hour. Not that anyone in Dallas drives that slow, but it’s a huge place and there’s micro health care communities within the area, so we’re really focusing on figuring that out first, and figuring out how to provide better care in Dallas, then growing within Texas.

Donlan: Two quick follow ups, Brent. First of all, what you explained at the beginning of the shift in health care, in home health specifically, when did you start to notice that?

Korte: From Medicare to Med Advantage?

Donlan: Yes.

Korte: I would say on a more colloquial level, when you walk into your grocery store and there’s UHC or one of the large Med Advantage providers is literally funneling people in and providing them the dream of better health care, I suppose. From a consumer and a more personal perspective, I noticed it there. I also noticed that at EvergreenHealth, their payer mix was diminishing over time, and health systems kept saying, “Listen, at some point you’re going to have to pull your weight and be the primary provider, this is in the Seattle area, to more Medicare Advantage groups.

It became so pronounced, this is now years ago, that Evergreen took a very concerted position to be working directly with payers, to make sure that our rates were sustainable, but they also had the expectations that we have the right visit utilization, the right visit counts. There’s a lot of unfortunate economics, freakonomics, I suppose. I think this is a universal statement that we all wish we were paid more by Med Advantage companies.

However, if we were to approach them in a way that would say, “We will keep your visits down to a certain level if you pay us a certain amount and we capitate that, and we go to risk,” but we don’t have those relationships presently. A number of people perhaps listening to this actually do have those relationships. Then Med Advantage companies would win because we all know that the multiple that they end up paying when the patient goes back in the hospital, there’s absolutely no comparison. We are looking for volume.

We’re looking [to continue] to provide more care in the DFW area and then in the Houston area, and then in the San Antonio area, and then in the Austin area. As we grow throughout Texas to make us the inevitable choice, not the, “Hey, we have to go with them because they take the insurance.” We want to be the folks that have figured out how to provide excellent care, have good quality outcomes, while increasing access and timeliness all at the same time.

Donlan: Great. Molly for you, what’s been the difference that you’ve noticed, if there are any, between working with Evergreen, where you’re part of a health system. Now, obviously, you have financial backing, but you’re more on your own, more independent. What’s been the difference for you?

McDonald: I think the proactive nature of it. When you have a little bit more support, you can be more proactive, you can look and see what’s coming. It’s not necessarily just figuring out the week in front of you. Trying to shift that mindset and putting in place the resources so that we can do that, so that we can see what’s coming up.

Whether it’s the Med Advantage or whatever we have to do to take care of our community — the community of our staff and the community that we’re providing care in. That has been one of the biggest things I’ve noticed so far, is really trying to figure out how to find that right mix, knowing that we don’t have maybe the resources in place yet to do that, but we have to do that in order to survive for years to come.

Donlan: In terms of the financial aspect, obviously, Brent, you acknowledge that the entire industry wishes that Med Advantage paid more for services right now. There are some recent developments that are encouraging: both the existence of your company and then also some of the other bigger home health companies are striking these different sorts of deals with MA plans over the last few weeks. How do you get to a point where Medicare Advantage plans are paying you appropriately in a way that you think is both good for the patient, and the clinician, and also financially viable?

Korte: It’s a volume and a quality thing, and just in general, making sure they understand and respect the value of home health. The days of home health being the kid on the playground kicking a rock on the edge of the playground. Those days are over. We are in the middle of health care. We are certainly known by health systems and needed by health systems. Do payers recognize it? Yes, payers certainly do. They’re taking a very interesting tack though and an interesting approach. Obviously with Optum purchasing LHC, and with the Humana-Kindred Partnership, etcetera, and other partnerships out there, it’s very interesting stuff.

I tend to think that although those partnerships in the long run are going to certainly pay off, in the short run, we’re talking about significant changes needed within enormous companies that have been very successful based on a very different model. LHC is probably the best example. A very smart company. In my opinion, LHC’s greatest asset, greatest attribute is their ability to integrate quality into communities. They’ve done a good job with that. It’s been based on a Medicare payment model.

That’s going to be a heck of a lot of work. For us to impress the financial importance on payers is for us to really show up and put some skin in the game. I don’t need to be careful on this one.

There is a subservient relationship between U.S. health insurance and providers. No matter what type of provider you are, you could be the best heart surgeon in the United States or you could be a struggling home health in rural Minnesota. You are always having to deal with the subservient, “Hey, hopefully they pay us” relationship. Those days have to be over.

We have to hold our payers as accountable as they’re holding us, and we plan on doing that. How are we able to do that? Someone once told me a long time ago that trust isn’t always doing things right. It’s being able to do something wrong and being able to come back and talk about it. That I think is a super important aspect of how we plan on building this. There’s a lot of payers in Texas too, and a lot of work to do here.

McDonald: I think the partnership is the biggest thing, being at the table with them and making sure that we’re all headed the right direction. Whether it’s keeping patients out of the hospital, keeping them home, but making sure we’re all in that same line. Sometimes quality is a general term. People are just like, “We want quality care.” Defining that, and defining it with them, so that we’re not having these two paths that maybe will cross, is essential. They don’t think we’re doing a job, we don’t think they’re doing a good job because we’re headed in different directions, but we all think we’re headed in the same. Really trying to partner with that, to keep everybody viable, keep everybody happy and going in the same direction.

Korte: Molly said to me the other day that that quality is so much more than just getting good scores. I think that Frontpoint and many other providers in the United States feel this way. The future of quality is not about gaming the Oasis, or making sure we’re getting the right metrics for all manner of VBP or quality metrics. It’s actually adding value to that whole group of five that I mentioned earlier: employees, patients, community, payers and health systems.

Donlan: Molly, I want to follow up on your point. Do you feel like you have an advantage because you’re starting a new company from scratch? You can come to the table with them without all of this past strategy that your company may have done before, or other quality measures you have to follow on different patients and you can just come with a blank slate and say, ”Hey, let’s get this done together. Let’s form this partnership together and let’s make this make sense for both of us right now.’”

McDonald: I don’t know if I would say it’s an advantage because we’re not really dealing with a blank slate. These are current agencies, they’ve been agencies for a while. Coming in and just making sure we’re at the table is really the biggest advantage now in saying, ”Hey, this is important to us, we’re here and we’re going to start moving forward.” Regardless of what’s been in the past. “Here’s who we are now and here’s our plan and here’s who we’re going to be moving forward.” I think that’s the biggest thing.

Korte: If I can add just a little bit to that. Although we’re starting here, we’re planning our first tree, I suppose, in DFW. We also are working with a provider that’s found success in a way that we’re going to continue to professionalize. There’s a lot of work to do with our current providers to just bring them up to speed on all sorts of things. We may be building something like a skyscraper, but we’re starting with the house and we’ve got a lot of work to do on the house too.

Donlan: Now, that makes a lot of sense. Before we move on here, we do have a question from the audience and I think this is a good one. Obviously, relationships are key to making this work, but what are you all doing with data? Brent, you and I have talked about a data-driven approach before and how you want to follow that. It’s also something that MA plans care about a lot. How are you bringing data into this plan and making sure that data is both valuable to your organization, and what you’re doing clinically, but also valuable enough to plans that they’re interested in working with you?

Korte: I love the data question. Our moonshot is to make sure that data is front and center in every single decision that we make. To find a way to glean and then cut, splice, display and make actionable every piece of operational NBI relative to our work possible. We’re actually presenting speaking with our board of directors and later today and then also on Thursday. One of their big questions is, “What are you measuring and what do you want to be measuring?” We’re excited to share that list with them.

What we want to be measuring is, on a daily basis, the ability to dashboard everything from a business efficiency perspective. Business intelligence and market intelligence is really getting tackled quite well out in the community. There’s a number of providers that are doing great work and some other folks with new products that are out there.

There’s not a lot of operational intelligence or metrics outside of an individual’s EMR, so we’re working at that. I would say every medical record has some strengths relative to what your clinicians are doing at any given moment. Do they actually know what’s happening? I’ll never forget, a long time ago, maybe it was 2005, I worked for an organization that provided quite a bunch of flu shots, it was Maxim Healthcare a long time ago.

We were at the Boeing company, and I was walking around looking for one of the areas where we provide shots, pneumo and flu vaccinations. This is a super aloof thing to do but I was told to go in the store and I opened this door and there was this enormous wall. This was 15, 16 years ago. It was a digital map of the world and it had a blip for every single plane that was flying around the world, and it just was nuts.

This guy quickly escorted me out. He’s like, “What are you doing in here man, show me your badge?” I’m from Kansas so I’m like, “I’m from Kansas, I do dumb things all the time.” Respect to my Kansas friends out there by the way, except for the KU fans. Back to the story, it occurred to me that there’s this ability to know where people are, know what they’re doing.

We don’t want to know exactly where our people are. We’re not big brothers, that’s not at all what we want to be. We want to know what’s happening. Are our wounds healing? Are our patients thriving? Are we out there when we say we’ll be out there? Are we meeting service standards that we would expect?

Data isn’t just about the data we have, it’s about how we translate, analyze and make it actionable, so we’re working very hard on that.

Actually our third hire in our organization, it was my role and then Molly’s role as a quality and compliance lead. Then a gentleman named Alex Van Gundy, who oversees data, and we very purposely said this is how we’re going to start our company from day one.

Donlan: Molly, anything to add?

McDonald: I just really think the biggest thing with the data is using it like Brent said, in every other way but getting in front of it and utilizing it, so we’re not looking back all the time. That’s been a huge struggle of just the retro data, but also approaching the burnout and the clinician employee engagement and using data in that capacity. Saying, “Hey, look, all your patients are getting better with wounds, and how can we translate that to your colleagues and start using that?

Empowering people to use it in their every day to make their jobs more satisfying. Have some involvement and some empowerment from the clinician level and then learn from it. As clinicians grow, they’re all out on their own and about in houses and if one nurse or therapist is doing these amazing things, we want to make sure everybody has the opportunity to learn from each other. Data has a place there for that.

Donlan: What are you looking at now and what do you want the company to look at in terms of quality and what the standard should be moving forward?

McDonald: Not to sound cliché, but making sure that every visit is counting, and that efficiency has to be just dialed in. The next couple years as far as margins and reimbursement and everything, it’s not looking like it’s going to go up very much — if at all. Making sure that we are using that to be as efficient as possible.

We need to know that when a clinician pulls up to a house they know what they’re doing and they feel good about it and they have a plan to be there. Obviously, we’ll need to pivot, it’s home health and hospice, so who knows when you get there what’s actually going to happen. Being able to do that is paramount of survival in the industry right now, so making sure we’re doing that.

Just so much goes into it from the efficiency of the visits, the content of the visits, the utilization of the visits, all of that quality has to be everywhere. It just really does and it is everywhere whether we call it out or not.

Korte: Why is it that for years our industry has measured productivity on an X and a Y axis, so we have a certain amount of visits that are done in a certain amount of time?

We have the information and we certainly care deeply about the axis, what is the axis? It could be quality, earlier we talked about access to care, earlier we talked about timeliness, we haven’t talked about patient satisfaction. I’m creating maybe the Z axis double A, double B, double C, you name it.

There’s so many ways that we could measure our work and I think that that’s going to be our moonshot or our true north is trying to understand that clinical work is not necessarily right if it’s commodified. How do you capture and measure our ability to provide real value to humans, to people. I think about this all the time. We were at EvergreenHealth in the midst of the pandemic, I think it was summer 2020. I heard a story about a patient who was dying in our hospice program, and we couldn’t get in the assisted living facility. We had a chaplain, her name was Rabbi Sarah, and she had propped a cooler, like a milk crate against the base, the ground outside the window, and gone and essentially sung to a patient through an open window as a patient was passing.

How do I tie that into this conversation? Our ability to do, and measure the action of things like that and to encourage that culturally. I think that’s what makes home health and what makes hospice truly different. That’s what people expect because we’re not in this scripted, clean right angle, 90-degree angle environment of the four walls of a hospital. We are meant to meet the needs of a patient on a very personal level because it’s their house and it’s their world. Our ability to try to measure that and provide value in a different way is something that we’re absolutely focused on.

Donlan: Have things been a little bit crazy, just trying to get things launched over the last year?

Korte: Maybe some folks watching know I tend to be real casual. You got to be, right? Take your work seriously, not yourself too seriously, perhaps is a good mantra for me. I get more work done on an airplane than just about anywhere.

If an airplane doesn’t have wifi, I’d probably rather not go. It’s amazing how much work I end up getting done. We are working very hard. We have a small and highly efficient leadership team, and we’re going to be growing our leadership team soon.

We’ll be opening up a great opportunity in the coming days for another role because there’s so many hours in a day and we need more hands helping. I’m certainly enjoying this. It is really fun.

The nature of the work, the excitement, the fast-moving, the lack of bureaucracy is wonderful. The ability for us to make decisions succinctly, move with them, fail forward, fail quickly, and or succeed forward, succeed quickly is really exciting. We’ll be excited as we continue to develop our company to have more integration and to get some of these early changes moving. We are absolutely building the ship as it launches.

McDonald: I agree. I think it’s really exciting. We really believe in the work and there’s so much thirst for this work out there. It’s bonkers. It’s just, like Brent said, fast-paced and moving, but I think I told him even on the hardest of days, it’s still super exciting. We believe in what we’re doing, and so my hardest days have still been pretty great.

Donlan: Obviously you have enough on your plate already, but in terms of next steps with growth, where do you want to go from Texas? Can you all explain what the growth trajectory looks like right now? I know you don’t have a perfect picture of what it looks like, but what your plan is moving forward, both in Texas and then outside of Texas afterward?

Korte: Yes, so there’s a lot of opportunity in Texas. It’s super fragmented, with a lot of very small providers.

It’s necessary to have a critical mass there. To be more forward, we’re planning on continuing to grow market share very aggressively in the Dallas area. Certainly looking at Houston. Houston is an intimidating market – very fragmented, very local, but we’re not intimidated by that. I think we have a very unique value prop for that area. Then really connecting south down I-35 to Houston and even San Antonio within Texas. As far as nationally goes, we are unabashedly looking for the right opportunities. We are being very careful not to say that we want to work in a certain state.

We don’t want to go into a market simply because we found a pin on the map and they had a lot of high incidences of Medicare utilization and higher average age, higher comorbidities, fewer providers, worse quality, those are all common things that brokerages are looking at. We have a lot of people looking, and we’re looking ourselves, and we’re waiting for the right opportunity. We absolutely insist upon making sure that the providers that we partner with are going to be good people, going to be patient-focused, likely have a business where legacy matters to them, and they want to have some level of involvement.

We are partners, we’re not takeover folks. We care very deeply about the relationships with the community. Frankly, we’ve had a number of very positive relationships with sellers that we were able to gain a fair amount of trust with them by just telling them the truth about what our goals are, and at the time, the conditions of the deal weren’t right on our side.

We’re making sure that they’re the right deals. It’ll be very interesting to see what happens within the M&A market this coming year. There’s a lot of folks paying a lot. Dare I say that the larger providers are paying too much. Multiples are quite high for some businesses that may not necessarily be justifying that, but I’m not them, and I know there’s a lot of smart people making those decisions.

Donlan: It sounds like a lot of significant market research going on. Molly, as we wind down, where would you like to say Frontpoint has gotten three to five years down the road?

McDonald: Ideally we’d want to be the home health and hospice that everyone wants to work for in a short statement. We want to be able to crack the code of quality and efficiency in home health and hospice, and be as proactive on everything that we can from a data perspective and bring it into every aspect where maybe it hasn’t been before.

Donlan: Brent, what about you?

Korte: No. 1 employer of home health and hospice clinicians and support staff in our country. That is a goal we are absolutely centered on, there’s a lot of work to do there. Most data-driven home health and hospice company in the United States. We want to be the provider that every MSO in the country wants serving their patients. We can’t get to a goal without a big vision. Where do we want to be? You mentioned geography, maybe it’s trivial, but for us, it is a long flight. We are going to have to find a more central location. It is important to us that – I’m going to get on my soapbox for 30 seconds here, Andrew because I think this really matters. Home health and hospice people really, really work hard.

The leaders of home health and hospice companies work their butts off. For so long the tech industry has focused on this. Let’s be a great place to work. Microsoft is right down the road from where we live, they used to do the steak lunch thing and the best benefits and a lot of that has just changed, but really we’re going to make this a fun place to work – ping pong table, etcetera. Why not have the more modern, 2023 – 2030 version of a great place to work for our home office. We’re going to be thinking about that when we centralize our central operations there.

We will be largely virtual, we’re going to be global, and when I say global, we already have support operations in India and we’re working very hard at making sure that our partners in India and our global partners are part of a larger team. Not just this relegated group of staff that work in another country.

All said, full circle, we want to make this a special company that does something different and that to be rewarding. Dare I say, can we, not just us two, us three on this call, but can every leader out there be so proud and so enamored by home health and hospice that we can make it a sexy industry for people to work in? Yes, because guess what, it’s a heck of a lot more fun than working in a hospital. For clinicians, we offer freedom, flexibility, and actual touch, trust, the patient connection, which is so rare.

We’re not passing out pills, we are out there improving the community and keeping people home and we want to bring that message to the masses, clinicians, and support staff and start hiring the smartest people out there to do this work.