Why Senior-Focused Primary Care Centers Are Reaching into the Home

More and more primary care centers have chosen to specialize in serving seniors.

In particular, companies such as CareMax Inc. (Nasdaq: CMAX), VillageMD and Humana Inc., mainly through its CenterWell Senior Primary Care arm, have all solidified their spots in the senior care sector by becoming a one-stop-shop for geriatric services.

In the case of Miami-based CareMax, the company provides primary care, specialty care and coordinated services to older adults. The company oversees 42 medical centers across Florida, serving roughly 16,000 Medicare Advantage (MA) members in value-based contracts, in addition to thousands of others in managed care.

“Our centers really provide all of the services to close the entire care continuum of the seniors that we serve,” Carlos de Solo, CEO of CareMax, told Home Health Care News.

This means the seniors that CareMax serves have access to numerous specialties, including cardiology, gastroenterology, neurology, psychiatry, dental, optical diagnostics and lab services, under one roof.

Additionally, CareMax has a strong focus on the social determinants of health. Along these lines, the company helps aid its members by ensuring they have access to vital resources.

“We can bring in members to educate on fall prevention or diabetes,” de Solo said. “We can offer healthy snacks to our members in order to create awareness around healthy eating or to provide a meal if they have food insecurity. We make sure they have housing security. We serve primarily underserved underprivileged populations.”

The CareMax business model is a full-risk delivery model, which means the company contracts with MA plans. These plans contract with the U.S. Centers for Medicare & Medicaid Services (CMS) to receive a monthly capitated payment per member.

“What they do is they effectively make up an administrative fee that covers the cost of enrolling the patient and the cost of their compliance,” de Solo said. “They defer the risk to CareMax. Let’s say, hypothetically, we’re receiving $1,000 for a particular member to manage every single month. We’re in charge of all the hospitalization visits, so if a member lands in the hospital that’s our responsibility. We’re in charge of all the prescription drugs they take, and all of their specialists and primary care costs.”

This value-based model aligns the interests of members and CareMax, according to de Solo.

“The only way that we can do well is by keeping them out of the hospital and investing as much as we can on preventative care so that we can really save lives,” he said. “This is the delivery system that’s going to transform the way health care is consumed in this country in the future.”

CareMax’s value-based approach has resulted in successful outcomes for the company.

Overall, CareMax serves a 64% dual population, but it has 74% fewer hospitalizations per thousand than the national average for Medicare patients. Plus, the company boasts a readmission rate that is 32% less than the national average.

In terms of next moves, CareMax is looking to rapidly expand its footprint to markets such as New York, Connecticut, Texas and Tennessee. Over the next three years, the company wants to open an additional 75 centers.

VillageMD is another company that takes a full-risk value-based approach.

“Our founder, Dr. Clive Fields, talks about how large health care costs are equated to health care misery,” Dr. Tom Cornwell, senior medical director of Village Medical at Home, told HHCN. “We’re trying to prevent that misery and keep people out of the hospital. Primary care has been shown to do that the best.”

Chicago-based VillageMD, through subsidiary Village Medical, is a provider of value-based primary care services.

VillageMD is a part of CMS’s Global and Professional Direct Contracting Model, which allows private health care providers to care for Medicare patients. The aim is to reduce overall costs.

The company serves more than 56,000 patients through direct contracting.

Having identified heart failure and COPD as diseases that most commonly land people in the hospital, VillageMD has created evidence-based guidelines for care.

In addition, the company is able to waive Part B copays through Medicare, cover gym memberships, offer home safety measures and provide home-based primary care through its Village Medical at Home arm.

Cornwell believes senior-focused primary care centers are successful because the model zeros in on Medicare’s sickest and most costly patients.

“These senior clinics or Medicare primary care networks that you’re seeing grow across the country are really good at taking care of Medicare patients, particularly focused through data analytics, on the sickest patients,” he said. “This way you dramatically reduce that huge spend of those few patients that consume the majority of Medicare costs.”

Cornwell noted that health care costs are remarkably concentrated, with 5% of the sickest Medicare patients consuming half of all the costs. The top 1% of the sickest patients consumed 22% of all the costs.

Aside from VillageMD and CareMax, Humana’s CenterWell Senior Primary Care has quickly become one of the fastest-growing senior-focused, value-based care providers in the U.S. The company has more than 65 centers with plans to open more in 2022.

Other companies in this space include Cano Health and Oak Street Health, which CareMax considers peers.

Dr. Greg Sheff, interim president of home solutions at Humana, believes there is ample potential for business opportunities for senior primary care centers and home health providers.

“We all spend more than half our lives in our home, so having ways that we can extend care, whether that’s maintaining health and wellness, or mitigating illness, is pretty critical,” he told HHCN.

VillageMD is already working with home health partners to provide holistic care delivery.

“We have partners in home health, with our direct contracting,” Cornwell said. “We work together to give these patients the greatest care — and then we all benefit when we can’t keep them out of the hospital.”

Similarly, CareMax also contracts with home health providers to extend care for its members.

“We definitely see home health as the final piece of that care continuum,” de Solo said.