Brent Korte was the chief home care officer at the Washington-based EvergreenHealth Home Care for more than eight years. During that time, it went all the way from a home health agency that was a financial drag on a hospital system to the point where it was an integral part of it.
Now, Korte is embarking on a new adventure as the leader of a brand new home health agency, dubbed Frontpoint Health. It just recently delivered on its first transaction, and Korte is hoping that acquisition was the first step in a nationwide expansion.
There’s a reason why Korte is going from one adventure to the other, and eventually moving his family and his co-leaders to a different part of the country. Frontpoint Health is not going to be like any other home health agency, nor is it going to be like EvergreenHealth Home Care.
Medicare Advantage (MA) plans are often a pain in home health providers’ sides. Some have even refused to work with them. But Frontpoint Health is doing the opposite.
In fact, that’s the ethos behind Frontpoint: to be a home health agency that specifically caters to MA, and does not rely on Medicare fee for service as its main revenue source.
“We want to take on those conversations with Medicare Advantage, provide the data and make sure that we are paid adequately,” Korte told Home Health Care News. “But we’re prepared to approach MA at its current cost structure.”
As of right now, Frontpoint has three locations: One Point Health, a home health agency in Dallas with a 2,200-patient census; Dignity Hospice, also based in Dallas; and Highland Hospice, which is located in Houston. Korte described the latter two as “medium-sized hospices.”
Frontpoint is backed by Park City, Utah-based Tacoma Holdings and Salt Lake City, Utah-based Cimarron Healthcare Capital. The only investment listed on Tacoma’s website is JQ Medical Supply, which is a home-focused DME supplier. Meanwhile, Cimarron has current investments in the behavioral health provider Ascent and Infusion Management, among a few others.
The leadership team at Frontpoint Health currently consists of three people, all veterans of EvergreenHealth: Korte, Molly McDonald and Alex Van Gundy. McDonald was formerly the program manager of quality and regulatory compliance at EvergreenHealth Home Care, and she will now serve as VP of compliance and quality improvement at Frontpoint. Van Gundy will be the manager of fata and business analytics.
Why Dallas, to start
There are two reasons why Dallas – a crowded home health market – was chosen as the launching point for Frontpoint. There are a few very large providers in Dallas, but also many smaller providers that have trouble “standing out.” Korte believes Frontpoint can distinguish itself in two ways, the first way being through quality and patient experience.
“Now that may seem like a boilerplate answer, but there are more home health agencies within a two-mile radius of [One Point Health] than there are in all of Washington state,” Korte said. “There’s a diluting of quality, and there’s a transient nature to staff. Our goal is to keep staff, and double down on quality and patient experience.”
And the second is the aforementioned MA strategy, one that few home health agencies in the area deploy.
“We want to go after Medicare Advantage,” Korte said. “And that doesn’t mean saying we’re going to take some MA, but be traditional Medicare heavy on home health. We are going to be focusing on adding value to hospitals and health systems by taking their MA patients and by partnering with these MA plans to try to seek out their patients and eventually go to value.”
Frontpoint won’t just rely on acquisitions, but de novos as well. For those new locations, it has its eyes on markets like San Antonio, Houston, Austin and Waco, Texas.
“We’re going to know exactly what utilization looks like in a certain area before we enter, and we’re not going to go into areas where there is already excellent care being provided,” Korte said. “But this is going to be the goal that I am obsessed with: We want to be the best employer of home health and hospice clinicians and support staff in our country.”
The future of Frontpoint Health
Korte’s – and McDonald’s and Van Gundy’s, for that matter – track record at EvergreenHealth was an impressive one.
“What we really did was take Evergreen from a loss to one of the most productive departments or divisions within the hospital,” Korte said. “Home care is responsible for a significant portion of the system’s bottom line, which is something that we’re really proud of. When you’re not for profit, it doesn’t mean that you can’t have a positive financial outcome.”
Moving forward, Linda Brabant will take over at EvergreenHealth Home Care as executive director. Korte even still has trouble not saying “we” when referring to EvergreenHealth.
But now, he is moving from a nonprofit agency to a PE-backed one, though he emphasized he did not want Frontpoint to get the label as “just another PE-backed provider.”
While venturing on a for-profit path by working with MA may seem like a paradoxical strategy to some home health providers, Korte and his partners are confident in their ability to build a viable, nationwide business with a focus on MA.
“We want to be the go-to for them and prove that we are worth better rates and approach partnerships directly with the plans and directly with the health systems for capacity and quality,” Korte said. “There’s nothing groundbreaking about it, except for the fact that no one’s really doing it.”
The plan is to start off in Texas, create some density, and then move to other regions of the country and do the same. Frontpoint will not be rebranding the organizations it acquires, however. The goal is to centralize the MA focus, while keeping things hyper-localized on the provider level.
“We may not even go with a single EMR,” Korte said. “We don’t have the goal to just drive efficiency for the sake of the bottom line. Our goal is to grow, win in the markets and create a significant amount of volume.”
Different MA strategies
Providers have been harsh on the way MA plans pay for home health services, particularly over the last couple years.
Certain providers have even deprioritized MA patients due to staffing constraints and the sub-par rates from plans. Still, the larger providers have made it clear they want to flesh things out with MA plans to form more feasible relationships in the future.
At the same time, there are examples of providers that are taking the more “proactive” approach that Frontpoint is.
For instance, the private equity-backed, Tennessee-based HomeFirst Home Healthcare has adjusted its operations to deal with the fact that there are so many more MA beneficiaries than there used to be in the markets it serves.
“It’s just like any other business where your cost of goods sold is below your payment rate,” HomeFirst President and CEO Jim Happ told HHCN in June. “In order to generate a profit, we have to gear ourselves toward the payment. … So I just think we’re better getting out in front of this and being proactive versus moving away from it.”
Korte subscribes to the same logic, which makes him the right man to helm Frontpoint.
As opposed to resisting, his company believes adapting instead is the best way forward. Only time will tell if Frontpoint’s approach is the correct one.
“When you look at the evolution of Medicare Advantage – and the fact that it is a tidal wave – if you’re not engaging in it, you’re about to get sucked up into that tidal wave,” Korte said. “If organizations are not fully prepared to provide care at those MA rates and grow their organization to have that efficiency and that level of value, they’re going to get swept up and not have long futures.”
