Vistria Group Believes It Found the Platform That Will Elevate the Home Health Industry

The Chicago-based Vistria group is one of the most active private equity firms in the home-based care space.

It has the providers – on the home care and home health care side – in Help at Home and Mission Healthcare. It has the technology in Medalogix, which is utilized by the majority of the largest home health players.

And now it has the Phoenix-based Professional Health Care Network (PHCN), a home health care management services company.

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The move was foreshadowed by The Vistria Group’s new senior operating partner Nick Loporcaro – the former CEO of Landmark Health – last month.

“One area that intrigues me is home health benefit management,” Loporcaro told Home Health Care News. “You think about other models that exist in health care like management services organizations (MSOs), or similar organizations like that, that can help the industry get better organized and elevate it.”

Just over a month later, the firm announced it has made a majority investment in PHCN, which partners with both health plans and providers to provide management solutions and care coordination.

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Brandon Cady, also relatively new to The Vistria Group and an operating partner, says the move was a direct reaction to a need for better organization in home health care as the industry moves toward value-based care.

“Given our areas of focus in home health on the provider side, and then with Medalogix on the clinical intelligence, data and software side of the industry, we really started to see patterns,” Cady told HHCN. “It was clear there was a need for a platform that could really accelerate the shift to value-based care and deal with some of the fragmentation issues that exist in home health.”

The Vistria Group is not alone in its interest in PHCN’s model, either. Both providers and payers are looking for this kind of platform, according to Cady.

Despite Medicare Advantage (MA) plans and other payers sometimes being at heads with home health providers, both do have similar incentives as value-based care becomes the goal in health care more generally, and specifically in home-based care.

“There’s actually a lot of shared interests and shared objectives,” Cady said. “But there’s also a gap in there. There needs to be a platform to really drive a different level of collaboration between the parties, drive more efficient data exchanges and really enable the movement in a very structured way to enable value-based care within home health care.”

The Vistria Group is banking on PHCN being that driver. In just a few years, its platform has gone from being responsible for 350,000 lives to 950,000 lives, mostly concentrated in the Western U.S.

“We really believe that one of the most important parts of this [equation] is bringing together a network of the highest performing home health providers,” Cady said. “And that really becomes the basis of the partnership: that PHCN, between payers and providers, can facilitate this at scale as well as anyone.”

While consolidation is largely inevitable in home health care, there’s a chance that platforms like PHCN’s could keep it from happening on a larger scale.

For instance, the ability for providers to create the right partnerships with payers – ones with fair rates and opportunities to capitalize off value-based care – could keep smaller agencies from being boxed out.

“Some amount of consolidation is inevitable,” Cady said. “But I do think the availability of a tech-enabled platform to automate the collaboration between payers and providers will help elevate providers.”

Still, it’s likely that the top-performing providers will be the ones most in alignment with payers, and thus the ones that will benefit most from a platform like PHCN’s. 

The Vistria Group has long been bullish on home-based care. Now that that sentiment is far more ubiquitous, its next goal is to find what it believes is still missing. 

In PHCN, it thinks it has that.

“What’s missing here is direct alignment from the payer, through the provider, in the best interest of the patient,” Cady said. “There needs to be direct alignment through reimbursement models. And that’s where there’s been a little slower progress in home health.”

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