The ability to deliver higher-acuity care in the home is now table stakes.
That’s especially true for health plans and health systems following the introduction of the COVID-related Acute Hospital Care at Home Waiver by the U.S. Centers for Medicare & Medicaid Services (CMS) in November 2020.
Eventually, though, the public health emergency is going to go away – with the waiver possibly ending not too long after. And for higher-acuity care in the home to truly catch on over the long run, stakeholders will need to beef up their managed care strategies, according to Contessa Health CEO Travis Messina.
“Having that managed care strategy and conveying that value proposition, again, to the payers and the providers across the country, I think, is where you’re going to see outsized value delivered,” Messina told Home Health Care News.
The Baton Rouge, Louisiana-based home health and hospice provider Amedisys Inc. (Nasdaq: AMED) announced its $250 purchase of Contessa in June 2021 and closed the transaction on Aug. 1.
HHCN recently caught up with Messina for an update on Contessa following that major milestone. In addition to the hospital-at-home waiver, Messina also addressed the growing demand for home-based palliative care and models that bring skilled-nursing-facility (SNF) care into the home.
This interview was edited for length and clarity.
HHCN: This is the first time that we’re talking in over a year. And I know that you’ve hit some pretty major milestones at Contessa since then. Let’s start by talking about joining Amedisys. What does that mean for Contessa?
Messina: I think the transaction that we completed with the Amedisys — and it’s actually coming up on a year since we signed the deal, though a little bit less since we closed it — allows us to offer our partners a true comprehensive continuum of services in the home. And by partners, I mean health systems and health plans. We all know that there are a lot of problems in health care related to the fragmentation of home care services.
Being on the platform really accelerated that vision of being able to provide everything from home-based primary care to hospital at home, SNF at home, traditional home health, home-based palliative care and hospice care. Creating that seamless experience, in our opinion, makes Amedisys and Contessa second to none in the country. This is a truly differentiated offering.
Having Contessa as an in-house partner, what does that allow Amedisys to do that maybe it couldn’t have done two or three years ago?
There are two areas that we supplement or really provide something extra to Amedisys.
One is the ability to cover higher-acuity care members, right? If you think about it, they’re predominantly a traditional home health and hospice provider, with very essential and critical services. But that ability to treat that upper-end of the acuity spectrum was a void that they had — and we fill that void.
Secondarily, Contessa really brings a risk-based care mindset to the Amedisys teams. All of our contracts with managed care organizations are value-based in nature. All of the services, expertise and knowhow that we have related to managed care, that’s something that was really desired by the Amedisys team as part of the transaction.
As the founder of this business that has gained a lot of momentum since its launch, what has it been like to watch the growth and evolution of Contessa? When you first had this idea, would you have guessed you’d be part of a company like Amedisys?
We always knew that it was a possibility that we could be acquired by another organization. I have a background in M&A. I knew that was a possibility, but it wasn’t the goal. We didn’t set out to sell the company. We actually were going down a path of raising a pretty significant amount of capital from a private equity firm.
When we had the outreach from the Amedisys team, we had the discussions going over all the possibilities on the table if we were a part of their platform. And ultimately, if we wanted to have a truly scaled, comprehensive home care platform, we knew that the best outcome for not only our team members professionally, but for our patients and partners as well, was to team up with Amedisys.
They’re one of the leading providers of home care services. They’re in, I think, 39 states and have something like over 20,000 caregivers. That accelerated the vision. You have to sort of put pride of authorship aside and know that sometimes there are very easy decisions that can be made that can make you better. Being a part of the Amedisys platform was one of those decisions.
As we’re talking here in mid May, what does the overall Contessa book of business look like, in terms of JVs across your different focus areas?
Firstly, when we announced the transaction in late June, and then ultimately closed it in August, you had a little bit of the “slow down to speed up” component. That’s just part of the deal. Naturally, those health systems, they wanted to know what the deal meant for them, their caregivers and the patients in their community. We had to explain the rationale of the transaction with Amedisys. We had to methodically talk them through that vision.
Secondarily, what this means, we now have a number of health systems that are pursuing truly comprehensive partnerships. We didn’t formally announce this, but it was mentioned in our earnings call a couple of weeks ago: Mount Sinai actually contributed their home health operations in the south Nassau community to our existing partnership. And so now, as part of the Mount Sinai partnership, we have hospital at home, SNF at home, palliative at home and traditional home health services.
As we sit here today, we have 10 partnerships in total. We have eight that are operational and two that should go live in the next couple of months. We plan to add another five partnerships before the end of the year. And as you look at those, you will see that they are more comprehensive in nature. We’re being very targeted in those partnerships, so that we do bring a full suite of services for the home to those communities.
I know that especially in the aftermath of a transaction like this, there’s going to be a lot on your plate. But again, as we’re talking here in May, what’s your current No. 1 priority?
I think it’s very similar to health care providers across the country. It is singularly focused on recruiting and retaining high-quality caregivers.
Do you get a sense that clinicians and caregivers want to work for a, really, one-of-a-kind company like Amedisys/Contessa? We hear all the time about clinicians wanting to do more advanced work in the home.
Absolutely. As we continue to grow our business, as I mentioned, my singular focus is on recruiting and retaining those individuals. The biggest challenge has been making caregivers aware that this role exists. Typically speaking, when we go out and we’re talking to a candidate about a role with one of our partnerships, they’ll say, “Oh, you know, I don’t think that I’m ready for home health.” We may then say, “Well, I think it’s a little bit different than home health. Let’s explain to you the models that we provide here at Contessa.” There are a lot of people — as you can imagine, because there’s obviously over 20,000 of them that I noted — very interested in the core Amedisys home care services.
But when I speak specifically to Contessa, I think the bigger issue that we are facing right now is creating market awareness for this role. Once we do share what it is that clinicians and caregivers can do with us, the fact that they can have smaller panel sizes and more direct interactions with their patients, the fact they can really create that connection to get patients back on their path to recovery in a much quicker timeframe, they are overwhelmingly interested.
I would say that our turnover rate speaks volumes to that, because year-to-date it’s been impressively low in that regard. I think that satisfaction is absolutely there.
When I first started reporting on Contessa, there were a few times I would describe Contessa as a hospital-at-home company, and somebody would explain, “Well, that’s not quite right.” You’re also doing in-home palliative care and SNF-level care in the home. Do you think that people understand exactly what it is that you do?
I think those who understand the value of a true home care strategy or the home as a service line completely understand what we’re trying to accomplish, or what we’re pursuing with our partnerships. I think if people only want, as you had mentioned, “just a hospital-at-home initiative,” or “just a SNF-at-home initiative,” those aren’t really the types of partnerships or dialogues that we’re wanting to engage in at this time.
It’s very similar to a hospital, right? If you think about it, a hospital has lots of different units to care for lots of different types of patients that have varying levels of illnesses. You have to have that same capability when you’re in the home. So you’re absolutely right. We do not want to be a hospital-at-home company. We don’t want to be a SNF-at-home company. We want to be a comprehensive home care company.
Those are the areas where we’re focusing our discussions and efforts right now. We’re trying to kind of cancel out the noise, if you will, because there is a lot of interest or talk related to hospital at home. And we’re excited about that. But we’re trying to make sure that we create the home as a service line in a pretty meaningful way.
Contessa doesn’t neatly fit into one bucket, as far “a type of care” in the home. It’s more of a spectrum of services. But is there a spot in that spectrum where you’re devoting the most resources toward? Or is it spread across the board, from hospital-level care in the home, to palliative care and SNF-at-home type care?
We always want to focus on the breadth of services, or the full suite or spectrum — however you describe it. That said, we do place an outsized emphasis on certain areas, given the opportunities that we find. We actually think that there’s an outsized opportunity in the SNF-at-home and palliative in-home models, so to speak. We think that for various reasons, for various dynamics that are presenting themselves across the industry. It doesn’t minimize the opportunity for hospital at home. It’s just that we’re seeing an outsized portion of our efforts being dedicated toward the latter two.
Why do you see this growth opportunity in palliative care and SNF at home, in particular?
I’ll speak to palliative at home first. I’d say there’s significant upside for palliative.
A: It’s a widely under-utilized service. I personally just had a family member that went through a pretty serious illness ultimately transitioned into hospice and didn’t have that service nearly as long as they could have. I think the significant under-utilization of it is one component.
B: I would point to the fact it’s longitudinal in nature, where hospital at home and SNF at home is very episodic. It’s an acute event. Having the ability to engage with that patient, over many, many months, or many, many years, can be extremely value-added — to that patient, to that patient’s family, to the caregivers who are a part of that care plan.
I think that those are two major factors that are driving the significant interest in palliative care.
As it relates to SNF at home, we’re seeing increased opportunities for a couple of reasons. One: Patients are coming into hospitals; they’re having higher-acuity events, and so they’re not appropriate for hospital at home. They absolutely need to be in that hospital bed. Now that said, because of the staffing challenges, they need to get that patient out as quickly as possible — when appropriate.
There’s a need to get them out, but they don’t have the services they need to take care of that patient. Compound that problem with the fact that SNFs are now under tremendous pressure. They’re having staffing issues. And on top of that, they got a proposed rate decrease that just came out. I think that you will see an overwhelming number of SNFs go out of business, further exacerbating the problem, and thus increasing the need for “SNF beds,” albeit in the home. I think the convergence of those factors is creating tremendous demand for the SNF-at-home service. In some cases, that increasing acuity of patients that are coming into the hospital, it’s minimizing, not eliminating, the need for “hospital-at-home services.”
Hospice News recently had its Palliative Care Conference. At that event, a speaker made the point that there’s a lot of organizations engaging in risk or value-based care, leveraging palliative care almost as a glue holding everything together. Is that something that you’ve noticed? Do you think that as health care continues to shift towards value, more people are going to recognize what palliative care brings to the table?
Absolutely. I completely agree with that speaker in that regard. I think that you should never use economics as a motivator for those services. But you can’t deny the fact that for risk-bearing entities — these value-based care organizations, whether they’re physician practices or ACOs — they simply don’t have the resources and bandwidth to dedicate to those patients who have intensive care needs. Palliative should not be confused with hospice. And in our opinion, it is not even a pre-hospice model — a lot of palliative models are. That’s not how we view palliative. It is really that longitudinal-support service for patients with conditions they’ll never be relieved of. Not having the ability to provide those services to those patients, to prevent them from having ED visits, to prevent them from having hospitalizations, and bringing that care to the home, can be tremendously valuable.
Again, a few years ago, I feel like there were a handful of higher-acuity care in the home businesses other than Contessa — a few pretty well-known ones, too. It seems like there’s a new startup popping up every month that’s doing home-based palliative care or hospital-level care in the home. Do you see this “higher-acuity-care-in-the-home space” becoming more competitive? And if so, what’s that mean for Contessa?
I absolutely am seeing it be more competitive. I actually think that’s a good thing.
When we started, in many instances, we were the only ones having that conversation with health systems and health plans. We’d come in and present the idea; they would say that they’ve never heard of this, or this can’t be done, et cetera. Now with the advent of the Acute Hospital Care at Home waiver program that was tied to the public health emergency — and the hundreds of health systems that have signed up, albeit not all of them are operational — they recognize that this can be part of their suite of services. So whether that’s health systems doing this on their own or other companies coming into the fold, I think it is creating an appropriate market awareness and is helping people to realize that it is something they need to entertain — building out, partnering or buying.
That market awareness, candidly, makes it a little bit easier for us to help individuals realize that there should be the standard of care — and it should be something that is offered in every market, where it can be delivered in a high-quality manner.
As we wrap up, could you maybe tease some of Contessa’s plans for the back half of 2022?
As it relates to the balance of the year, I had noted trying to get an additional five joint ventures, in terms of our partnerships. I think that as those come to fruition, you’ll see that theme of providing a comprehensive suite of services continue to play out. That is a focus of ours, so that we can meet the patient’s needs in the home for a broad array of patients. And I do think that you’ll see, increasingly, our ability to do that same offering, not only with health systems, but in specific markets with health plans as well, which would include palliative services.
What macro-level trends, maybe even ones we haven’t talked about yet, do you see influencing Contessa most moving forward?
I think the biggest macro trend, other than labor issues, is related to managed care strategies.
It goes exactly to what we were describing a minute ago, in the sense that you had a number of health systems sign up for this waiver program, but have yet to operationalize the program. Obviously, COVID surges are waning despite these little pockets of flare ups. It’s not a stretch of the imagination to assume that the public health emergency is going to end at some point.
When that happens, if these health systems truly want to have a home care strategy going forward, they have to have a managed care strategy. And that’s where Contessa has always spent an enormous amount of its time, once it had very sound clinical protocols and policies in place.
Having that managed care strategy and conveying that value proposition, again, to the payers and the providers across the country, I think, is where you’re going to see outsized value delivered. A lot of high-quality care organizations can build programs and operations, but if you can’t get reimbursed for it, it is not sustainable. The challenges are too immense on health systems to do this in a philanthropic manner. And so having that managed care strategy is going to separate the haves and the have nots.
*Editor’s note (June 7, 2022): This interview took place on May 10.
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