Lessons From a Joint Venture Approach to Care at Home
Care-at-home treatment models have taken root and rapidly expanded in scope in the past few years, accelerated by the effects of the COVID-19 pandemic. It has been estimated that as much as 25% of the cost of care for Medicare’s fee-for-service (FFS) and Medicare Advantage (MA) patients could shift from facilities to the home by 2025.
In this changing landscape, hospital systems looking to build care-at-home services find themselves considering many options for optimizing the launch and operation of these programs.
When Contessa launched in 2015, our hospital-at-home model was designed around a joint venture structure. This innovative approach to building the care continuum at home has helped us gain experience and hone a more targeted and successful model of collaborative care delivery with our partners and with payers.
By creating a joint venture partnership, Contessa connects hospital systems with our unique approach to building care at home services. Contessa’s commitment starts with a capital contribution to the joint venture alongside our partners and continues with the risk we take on with our reimbursement structure.
This vested interest in the success of our programs has helped Contessa remain nimble and innovative to solve the complex and unexpected challenges that creating a new frontier of care at home can uncover.
What are the key lessons of Contessa’s joint venture model?
To understand why Contessa’s model is so successful, it’s important to consider the key lessons it has taught us along the way. One of the most significant is the concept that partnering with other organizations creates stability and growth, which is especially true when rapid innovation is happening in the healthcare industry.
For example, the Contessa + Amedisys partnership itself is a testament to the way in which we saw the benefit of bringing together resources and experience to offer a more comprehensive line of care. In turn, hospital systems that partner with Contessa are able to access the support and resources that Contessa and Amedisys bring to the table, allowing them to expand their options of services provided to patients with minimal operational lift.
Going at it alone and trying to build change management from the ground up can be challenging without ready-made solutions, well-developed resources, and expertise in processes like negotiating with health plans and developing a downstream network of providers. We have seen the pitfalls and mistakes that can happen when trying to build a scalable care-at-home program, and we understand what works and what doesn’t.
Some strategies we’ve built:
- Working hand in hand with a hospital system’s managed care team to create a risk bearing entity that establishes and maintains all new payer contracts, creating a new, additional category of services for the hospital system to offer to patients.
- Introducing new lines of business beyond just hospital-at-home by building out a Comprehensive Care at Home platform that may offer Recovery Care at Home, Rehabilitation Care at Home, Palliative Care at Home, home health and hospice.
- Contributing capital alongside hospital system partners, which represents an investment by all parties, demonstrating we are deeply committed to the best outcomes, right along with our partners.
- Driving the change management with the hospital system because we know that increasing the volume of the joint venture is core to its success and purpose of alleviating overcapacity strains on the healthcare system. We also know that developing the full continuum of care in the home—not just hospital care in the home—is part of creating this growth and achieving our purpose.
- Implementing proven workflows through experience gained via launches in multiple markets. Chances are, we’ve been there before, seen the challenges, and know what works to avoid poor outcomes.
How exactly does Contessa take on risk in its joint ventures?
Contessa’s ability to mitigate financial risk in its partnerships is one developed with experience and an understanding of how to maximize productivity and value. Our proprietary technology platform, Care Convergence, allows us to model historical costs of a standard hospital DRG, and build episodic bundles of care that allow for the provision of more cost-efficient services.
This episodic bundled payment is capped for payers and includes all expenses incurred in delivering care, including the potential for readmission—a possibility that is historically very low with our programs. Should any complications of care occur, the joint venture absorbs financial responsibility for any cost above the episodic cap.
We promote this approach because we believe that entering value-based arrangements aligns incentives across all parties—payer, health system, and Contessa—to drive effective and high-quality care at the lowest cost to all parties involved. This model also reduces complications that drive up the cost of care and leads to a better patient experience. Consider the following program metrics:
- A patient satisfaction rate of 90% across all models of care
- Rate of care complications such as falls with injury, new pressure ulcers, and new infections across all Comprehensive Care at Home programs: 0.2%
How this joint venture model results in increased value:
Each 30–60-day bundle with Contessa’s programs sees greater profit margin compared to traditional post-acute spending in these ways:
- By creating unique options for patient alignment with community resources and providers, Comprehensive Care at Home provides integrated care options that decrease the chance of costly complications often experienced in more fragmented systems.
- The 111 DRGs Contessa takes home for care are historically costly DRGs for hospitals, which we then turn into profitable DRGs with the at-home model of care. Common conditions include cellulitis, congestive heart failure (CHF), pneumonia, urinary tract infections (UTIs) and chronic obstructive pulmonary disease (COPD).
Why building the care continuum is essential to success:
We’ve learned that to bring this success to fruition and create a scalable model, it is essential to build a complete continuum of care at home with each partnership. This is the ultimate goal of Comprehensive Care at Home.
By establishing a joint venture with Contessa and Amedisys, health systems can leverage our national experience, scope and resources to build a full scale, at-home continuum of care. This benefit allows the partnership the advantage of being the highest quality, lowest cost site of care for health plans in its market.
Building the future of healthcare, together
When you understand the advantages of Contessa’s experience in building a Comprehensive Care at Home model, it’s easy to see its impact on the trajectory of care in the future. That’s why Contessa’s list of partners who understand this importance is growing, as we’ve seen with Mount Sinai Health System’s expansion of home health services, and most recently with the addition of University of Arkansas for Medical Services.
As we continue to meet healthcare industry needs, the lessons we’ve learned with our joint venture partnership approach will continue to inform our ability to be nimble and creative in the options we present to hospital systems. Together with our partners, we are changing the way healthcare is delivered, now and in the future.