How Contessa Solves 4 Key Issues Hospital Systems Face Today

Hospital systems are facing enormous pressures in a post-COVID environment. The past two years have seen major challenges in decreasing the cost of care, increasing revenue, managing staffing constraints and addressing shifting consumer demands. In the same way that the rest of the world has adapted to the many changes that the COVID pandemic introduced, the delivery of healthcare is evolving as well. 

In rising to meet these challenges, novel approaches are necessary. Thankfully, hospital systems who turn to a partnership with Contessa find a source of innovative solutions for these key issues that hospital systems face today. Having Contessa as an operating partner is a smart move in a healthcare world that is pivoting rapidly to adapt to new norms, and eases stressors for health systems that prioritize this choice. 

Challenges in decreasing the cost of care

The cost of care has dramatically increased since the start of the COVID-19 pandemic, and the causes are multifaceted. Inflation, the nursing shortage (and accompanying increase of staffing compensation), and unprecedented volume and revenue loss have all led to billions in overall losses and 33% of hospitals operating on negative margins. 

With potential CMS rate cuts to home health agencies on the horizon for 2023, the need to address this challenge is even more urgent. Building a sound operational model that makes in-home care viable and financially successful requires expertise, ingenuity, and a team approach, all of which are ingrained in Contessa’s Comprehensive Care at Home model. 

How does Contessa solve the challenge of decreasing the cost of care?

A partnership with Contessa addresses the cost of care in several beneficial ways. One of the most immediately relevant is the fact that expanding available beds and services is a costly proposition for hospital systems. Expanding hospital beds through the addition of square footage to an existing brick-and-mortar building comes with a median cost of $369 per square foot.  

In contrast, when hospital systems partner with Contessa, they engage in a joint venture structure. This means that Contessa also invests in the initial cost to launch a hospital at home care model and assumes a portion of the financial risk.  

Because of this shared process, rather than going at it alone, a hospital system can expect their initial investment in the joint venture to be typically under $1 million dollars. This investment establishes all the key components of the care at home program, including staffing, setting up a network of ancillary services, and more.  

Additionally, the beds created by Contessa’s programs are in operation within 3-6 months, as opposed to 2-3 years or more—perhaps not including a lengthy regulatory process– to construct a bed tower. 

Another way that Contessa helps to alleviate the burden of high costs is by using the aforementioned joint venture model to share financial risks for patients admitted to its programs. By sharing the costs to launch the program, and negotiating a per-episode reimbursement structure, Contessa absorbs a portion of these risks. This is fundamentally different from a traditional vendor approach, which does not involve partnership and asks the health system to absorb all risks and costs. 

Challenges in increasing revenue

Along with decreasing the cost of care, hospitals are looking for ways to make strategic moves to increase revenue, in an increasingly competitive environment. Diversifying is an important part of that strategy, and new modalities of care allow hospital systems to lead the future direction of care delivery.  

How does Contessa solve the challenge of increasing revenue?

In this context, Contessa is innovating the future of healthcare delivery in the home. Along with acute hospital care at home (known as Recovery Care at Home), Contessa’s comprehensive care model now incorporates the continuum of care in the home. 

Services beyond Recovery Care at home include skilled nursing facility-level care with Rehabilitation Care at Home, and support for complex and life-limiting illness with Palliative Care at Home.  

This diversity of available services is poised to grow in the future, especially since Contessa joined forces with Amedisys, Inc. in 2021. Amedisys brings additional staffing support to the table along with other resources to support further service lines that bring care into the home for eligible patients. This in-home approach is strongly preferred by most people given the option, as we’ve seen with eligible patients in our Recovery at Home program, the majority of whom choose their home for their care. 

With Contessa’s cutting-edge care approach comes additional revenue streams for hospital systems. These include the following opportunities: 

  • Increased ancillary service revenue- hospital systems who own ancillary services needed to operate the JV program can use this to build a network of services for care in the home. This includes components like home health, home infusion, and transportation. The margin on these outpatient ancillary services is greater than the historical margin for patients admitted to the hospital. 
  • Increased revenue through backfilling beds- less acute patients who are transferred to care at home decant beds for additional, more acute patients presenting for care at the hospital. 

Additionally, Contessa’s years of experience in managed care contracting contributes built-in structure and scalability to each joint venture. Billing and claims are managed by Contessa, freeing hospital systems from the burden of developing processes for this aspect of the program.  

Staffing constraints and the effect on capacity

One of the biggest financial challenges over the past two years that hospital systems have had to grapple with is staffing constraints, and the resulting strain on capacity. This affects both previous challenges immensely, by increasing the cost of care and creating lost revenue due to unstaffed beds. 

Labor costs, particularly with regard to nursing, have increased 19.1% from pre-pandemic levels largely because of the need for contract nursing staff to fill vacancies. 

How does Contessa solve the challenge of staffing constraints?

Several factors help Contessa to remain well positioned to staff nurses despite labor shortages across the healthcare industry.  This allows us to create more staffed beds through both the Recovery Care at Home and Rehabilitation Care at Home models. 

Initially, as each joint venture program launches, Contessa’s structure only requires a small number of nurses to operate the program. These nurses are recruited by Contessa, which has access to robust resources through its parent company, Amedisys. Amedisys offers a team of 75+ nurse recruiters and employs more than 7,000 nurses.  

Because the type of nursing work and the care environment through Contessa is unique and rewarding, employee satisfaction is reflected in the low nursing turnover for these programs, at only 2%. 

Once Contessa’s in-home programs are in operation, its resources provide for a slow ramp up of nurses to support the increasing size and scale of the joint venture. We also support partners with home health agencies to staff nurses with the appropriate acute nursing experience to be successful in the program. 

Addressing shifting consumer demands in a post-COVID world

The COVID-19 pandemic has left an indelible mark on the delivery of care. At the beginning of 2020, virtual visits increased by a whopping 3000% percent. This has set a standard for accessibility that patients continue to expect. 

This increase in technology-driven care also includes home-based care. Fears about COVID-19 exposure influenced patients’ desire to receive care at home, but beyond that, as baby boomers age there will continue to be demand for modalities of care that support aging in place. The U.S. Department of Health and Human Services reports that during 2020, there was a 63-fold increase in telehealth paid for through Medicare, portending the future of this approach. 

How does Contessa solve shifting consumer demands?

Contessa’s Comprehensive Care at Home approach spans the spectrum care delivery, from higher to lower acuity. Existing models include the aforementioned Recovery Care at Home, Rehabilitation Care at Home, and Palliative Care at Home, but the future holds exciting promise with emerging care models to include services like primary care at home as well. 

This comprehensive approach to care at home allows us a unique ability to impact social determinants of health and health equity, and to create a scalable model of home-based care that is a complete ecosystem of care available in the comfort of people’s homes. 

Overwhelmingly, patients prefer this approach to care, with 90+% of patients accepting in-home care with the hospital-at-home model, when presented with the opportunity. And patient satisfaction scores reflect well beyond this initial acceptance, as well: the Recovery Care at Home program boasts satisfaction scores of 90%. 

Emerging trends drive redefined care

The ultimate outcome of Contessa’s Comprehensive Care at Home model is that it answers many of the key issues that hospital systems face today, while providing safe, high-quality care in the comfort of patients’ homes. This benefits providers and patients alike and is poised to continue to redefine care delivery well into the future. 

Meet Our Expert

Travis Messina, Founder & Healthcare Executive

Travis founded Contessa in 2015 to provide a new standard of healthcare in the home for providers, payers and patients. Since its launch, the company has partnered with twelve health systems and a major payer and continues to grow as part of Amedisys, Inc. Before Contessa, Travis built his career investing in healthcare ventures. He spent time at Martin Ventures, Vanguard Health Systems, Signal Hill Capital and SunTrust Robinson Humphrey.