Recognizing the need for a streamlined hospital-at-home supply chain network, Cardinal Health Inc. (NYSE: CAH) launched Velocare in 2022. Since that initial pilot run, Velocare has experienced significant growth.
At the same time, Cardinal Health is also making major strides in its overall mission to be a driver of at-home care.
Broadly, Velocare technicians deliver hospital-grade products and services to patients’ homes. The company touts its ability to make these deliveries in under 2 hours.
Velocare officially launched its first post-pilot customer in March 2023. Since then, the company has partnered with hospital-at-home programs at 12 hospitals and health systems across: Portland, Oregon; Atlanta; Knoxville, Tennessee; New Haven, Connecticut; Boston and more.
“I would say there’s not one prototypical customer that we work with,” Alex Hoopes, senior director of strategy and execution for Cardinal Health’s Velocare, told Home Health Care News. “We work with large academic medical centers. We work with nonprofits and for-profits. We work with health systems that have taken their very first hospital-at-home patient, and we’ve been able to step in and support some hospital-at-home programs that have been up and running for a while, and are looking for the right partner to help them kick into their higher stage of growth.”
Dublin, Ohio-based Cardinal Health is a distributor of pharmaceuticals and a manufacturer and distributor of medical and laboratory products. The company’s at-home business unit offers direct-to-home fulfillment and distribution services in the home medical equipment (HME) space, as well as in home health and hospice.
In general, Hoopes credits the wider spread adoption of the hospital-at-home model for Velocare’s growth.
“More patients need higher-acuity care, especially with an aging baby boomer population and especially in urban areas,” he said. “A lot of hospitals are facing really serious capacity issues. You hear a lot of stories of patients who basically have to get boarded in the ER because there aren’t beds available. Health systems are looking for ways that they can increase their capacity in a quicker – and more cost effective – timeline than building another wing of a hospital.”
More specifically, Hoopes points out that Velocare addresses a lot of the pain points that health systems experience when they are trying to stand up and scale a hospital-at-home program.
“We help contain costs with this model, as lots of goods and services need to be delivered outside of the four walls of a physical hospital, and we help dramatically improve the reliability and quality of the supply chain in ensuring things get to where they need to be on time, so that the patient’s plan of care can be executed exactly the way it was intended,” he said.
Aside from health systems and hospitals, Velocare has also received interest from payers that are doing direct care delivery and view hospital-at-home as an effective way to help drive patient outcomes and address high costs associated with traditional inpatient care.
Still, hospital-at-home is a fast-moving and dynamic model. This has meant that Velocare has needed to be able to quickly adapt to change.
“I think that introduces some good growing pains for us,” Hoopes said. “It’s about figuring out how we continue to expand what we do to offer more value and provide more support to the health systems that we’re working with.”
Hoopes is also thinking ahead to what the market will look like once the Centers for Medicare & Medicaid Services’ Acute Hospital Care at Home waiver expires at the end of the year.
“I do think the toothpaste is out of the tube, and hospital-at-home is here to stay,” he said. “The fact that there’s a renewal that’s going to have to come up at the end of this calendar year, and not knowing what that renewal is going to look like, is something that we’re all dealing with.”
Even with an uncertain future for the waiver program, Cardinal Health has expansion plans for Velocare.
Part of that means growing with Velocare’s current client base.
“A lot of the programs that we work with today are still early in their journey, and will be pushing the amount of patients they take through this care model fairly aggressively, and growing their census, so we want to grow with our existing customers first and foremost,” Hoopes said.
Overall, Velocare has made 7,800 deliveries in the home.
Velocare is also focused on geographic growth. The company hopes to achieve further density in the markets that it already operates in, according to Hoopes.
Cardinal Health’s at-home solutions business moves front and center
While Velocare is seeing growth, Cardinal Health’s at-Home Solutions business has also branched out, as part of recent organizational resegmentation.
The company’s at-Home Solutions business was once part of its medical-surgical unit. Now, this segment is its own umbrella.
“That’s a roundabout way of saying the home is important,” Rob Schlissberg, president of Cardinal Health’s at-Home Solutions business, told HHCN. “We want to be a major player and an enabler as we are continuing to find ways to drive that care.”
One of the ways Cardinal Health has been doing is its expansion into the diabetic space. The company considers it a major business opportunity.
Ultimately, Cardinal Health is working to position itself as a key advocate for the HME industry.
“We need more strong voices for the HME industry,” Schlissberg said. “We’re trying to have a bigger voice. We serve on certain committees within AAHomecare; we have lobbying efforts down on the Hill. We want to make sure that the HME itself is being recognized for the value in which it delivers.”
Robert Holly contributed to this report.
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