About 15 years ago, Scott Powder — the president of Advocate Health Enterprises — was excited about a new idea.
It was 2008 and the project was dubbed “Clinically Home”. The mission was to scale a hospital-at-home program pioneered by Johns Hopkins University.
Advocate Aurora Health, Amedisys Inc. (Nasdaq: AMED) and Raphael Rakowski – now the co-founder and CEO of Medically Home – were leading the charge.
“For a variety of reasons, mostly because payers weren’t signing up, the company blew up in 2010,” Powder said. “Ironically, before the economic downturn, Medically Home had a billion-dollar valuation. Then Amedisys went out and bought Contessa for $270 million. So I was thinking, ‘Boy if we would have just stayed together for those 12 years, wouldn’t that have been great?’”
Perhaps it was an idea ahead of its time, but Clinically Home stands out to Powder as an example of how the investments and innovative risks Advocate has made in the home have mostly proven out.
Advocate Health Enterprises is one of the largest integrated health systems in the U.S. and is the investment arm of Advocate Health. Powder has said in the past that his team is focused on three areas for growth and investment: aging independently, family development and support, and personal wellness.
In December, Advocate Aurora Health and Atrium Health merged, creating one of the five largest hospital systems in the U.S. Together, the two will be officially dubbed Advocate Health with a network of 67 hospitals, 21,000 physicians and nearly 42,000 nurses.
Advocate Health Enterprises was set up to invest in – and acquire – companies in the broader health care ecosystem. Over the past couple of years, the focus has revolved around aging independently.
“We have a huge footprint in value-based care, particularly serving seniors,” Powder said. “We take a lot of full-risk capitation in Medicare Advantage. We’re one of the largest ACOs in the country, and we take a ton of downside financial risk on our ACO members. So, we’ve got financial skin in the game.”
Advocate Health Enterprises recognized the need to have a broader ecosystem of services to help seniors stay out of the hospital, emergency room, nursing homes and other traditional post-acute care facilities.
For instance, Advocate Health now has its own hospital-at-home program, which is expensive to operate, but has been able to succeed despite reimbursement uncertainty.
“We have since stood up — primarily because of the COVID — our own hospital-at-home program,” Powder said. “It’s fairly expensive and the challenge is always going to go back to reimbursement. During the public health emergency, there was payment for this and [some]of that is going away. Without relationships with commercial payers, it’s really hard to advance the care model.”
Financially, it still benefits Advocate when low-acuity patients can be cared for in the home.
“Even if we don’t get paid, backfilling that bed with a surgical patient [in the hospital] or a patient who is higher-acuity is good economics for us,” Powder said.
Beyond the scalability of hospital at home, Powder believes there is real momentum behind ED at home.
“I don’t have it all figured out in my head, but I do think you can have a scenario where people ultimately are having an emergency room visit — in effect — in their home,” Powder said. “The step down to that is either staying in their home for observation or even for an admission. There are probably 30% of people sitting in our hospital beds today and maybe 25% of the people in our emergency room, maybe even more, who probably don’t need to be there anyway. They should be in urgent care or in a retail clinic. I think a lot of that ends up in the home. If you can figure that out with the economics, that would be a huge game changer in the health system.”
Advocate Health Enterprises also acquired the non-medical home care provider Senior Helpers over two years ago.
Powder is excited by the care management opportunities that surface once a health system like Advocate has home-based care capabilities.
“If you are providing services in the home, whether it’s private duty, hospice, Medicare-certified home health, you name it, the real innovation opportunity is around navigating care across a giant continuum,” Powder said. “That’s where I will give my organization a little bit of credit, because we have around 750,000 lives for whom we have full and complete financial risk for through value-based contracts. We’ve had to learn how to navigate them to the most expeditious and clinically appropriate care setting and make sure they don’t fall through the cracks.”