On Dec. 10, connectRN announced it had raised $76 million to scale its technology-enabled staffing platform for nurses. The Series F round was led by Suvretta Capital Management and Avidity Partners, with participation from several other groups.
While its involvement didn’t garner immediate attention, one of the home health industry’s biggest names was also among connectRN’s backers: Amedisys Inc. (Nasdaq: AMED).
“We need to be constantly innovating, partnering and searching for tools that can [strengthen] our workforce,” Amedisys Chairman and CEO Paul Kusserow told Home Health Care News. “We started to look at, and research, how we were going to come out ahead. We’ve been at this – the workforce challenge – long before COVID.”
The Baton Rouge, Louisiana-based Amedisys delivers home health, hospice and personal care services across 529 locations. It additionally offers higher-acuity care services in the home through its Contessa Health arm.
At its core, Amedisys remains an aging-in-place company and care provider, Kusserow said. Increasingly, though, its leaders are seeing opportunities to simultaneously act as an investor in up-and-coming businesses with strategic value.
Along with connectRN, for example, Amedisys was one of the early supporters of predictive-analytics firm Medalogix. That investment has been “an extremely good experience,” with Medalogix’s solutions helping Amedisys improve its quality of care and service utilization, according to Kusserow.
“By doing this, we can help companies emerge faster and give them a better perspective,” he added. “You can learn a lot. And together, we can develop a much-needed product.”
Headquartered in Waltham, Massachusetts, connectRN has raised more than $95 million since its formation in 2014. Broadly, the startup’s platform helps nurses and aides find work, whether that’s within a health care facility or in the home.
It specifically gives users access to flexible-shift opportunities and career-development resources, while likewise giving them the option to participate in a social network of professional peers.
“This has been a couple years in the making – not our connectRN investment, in particular, but just the thinking around how Amedisys should combat the labor pressures in and around our space,” Nick Muscato, the company’s senior vice president of finance, told HHCN.
Amedisys declined to share the exact size of its connectRN investment.
“The business is poised to deliver 240% organic revenue growth year-over-year in 2021, confirming our hypothesis that nurses and aides are not only in demand but are seeking a better path for their careers,” connectRN CEO Ted Jeanloz said in a press release. “Our ability to deliver the right opportunities, on their terms, in a supportive and nurturing environment is what we believe to be the future of health care.”
Staffing smarter, not harder
The main driver of Amedisys’ investment was the worsening supply-demand imbalance in home-based care. Demand for home health care is projected to skyrocket as baby boomers age, but nearly all providers have already hit growth hurdles due to the COVID-19 pandemic and clinician burnout.
Then, on top of that, the company identified a clear shift in how clinicians wanted to work.
“We want to be able to service all the growth that’s expected, which means we need to have the correct clinical capacity,” Muscato said. “In parallel with that and accelerated by the pandemic, we’ve seen this move to gig-based work.”
The legacy health care staffing companies are still out there, he said, but they’re now joined by more and more “technology-based, gig-based, shift-based models.”
Amedisys will operationalize connectRN in two ways.
Near term, it’s planning to use the staffing platform to find available clinicians in areas where it’s typically difficult to find them. Baltimore is a great example of that, according to Muscato.
The longer-term goal will be to leverage connectRN to better engage Amedisys’ existing PRN workforce. If the company is able to do that, it can, in turn, offset costly contract-labor utilization.
That’s where “a lot of the secret sauce will happen,” Muscato said.
“We have 3,000 PRN on staff today, but a ton of them have not done a visit for us in the last three or four weeks,” he said. “If we’re able to get capacity out of that group, that takes a lot of pressure off of the recruiting function by increasing what we’re able to do with the current staff.”
Beyond allowing Amedisys to take on more patients, that translates into a big bottom-line win, as even a small increase in the use of contractor labor can translate into millions of dollars of added expenses.
Before COVID-19, Amedisys used contract labor in about 2% of its home health visits, on average. During the worst stretches of the public health emergency, however, that rate has gone up to as high as 5%.
Currently, Amedisys’ contract-labor utilization is a little over 4%, Kusserow said.
The company believes levels will begin to normalize toward the end of 2022.
“During good markets, we tend to not neglect [the PRN workforce], but we don’t utilize them as much as we could,” Kusserow said. “And these are people who have our computers, who are credentialed, who are trained. We’ve done a lot of research on them over the past couple months, and what we’re finding is that there’s definitely availability and interest in more work.”
The key, Kusserow said, is “building the system” to unlock more utilization of the PRN staff.
‘We are disruptors’
Amedisys plans to launch a connectRN pilot for its home health segment in a couple weeks, Muscato said. Depending on how that goes, it will look to scale up the program – or expand it to other parts of its business.
In addition to the aforementioned benefits, Muscato said he’s excited about some of the support capabilities connectRN brings to the table, which could ultimately help with retention.
“They’ve seen firsthand with clinicians on their platform suffering from burnout, as they’ve had to deal with COVID over the last few years,” he said. “They’ve been able to incentivize and provide services to their clinicians through their platform to keep them more engaged. They provided clinicians access to Talkspace, for instance.’’
Those who follow Amedisys shouldn’t be surprised if it announces similar investments in the future. At any given time, the company has a list of about 250 non-core businesses it monitors.
“Obviously, all of those are in different stages of their lifecycle,” Muscato said. “We’re not necessarily tracking all of them from a pure investment perspective, but maybe from a potential business-relationship perspective as well.”
Contessa Health – acquired by Amedisys for $250 million in June – was even on that list at one point, Kusserow said.
“We are disruptors and innovators in the industry,” he said. “The idea is, we pick the spots where we believe that the issues are crucial enough that change is going to have to happen.”
