Last year, WellBe Senior Medical positioned itself as the “general contractor” for home-based care patients.
“We’re like the advocate and navigator … when you’re building a home, you’ve got plumbers, you’ve got electricians, you’ve got masons. You’re not an expert, so you hire a general contractor to figure all that out. We can fill that role for the consumer,” WellBe Senior Medical CEO Jeff Kang explained during the latest episode of HHCN+ TALKS.
Kang is the former CMO of the Centers for Medicare & Medicaid Services (CMS). Since his time with the agency, he’s worked with payers and providers. Now, he’s bridging the gap between the two with WellBe.
The Chicago-based WellBe offers home-based medical care services to patients who are facing multiple complex health challenges. It is backed by the private equity firm Chicago Pacific Founders.
Kang sat down with HHCN to talk about the current state of home-based care, what providers can do to enhance their value proposition and much more. Highlights from the conversation are included below. View the episode here.
HHCN: I would love to talk about your background, because I think it’s a pretty unique one. Could you take us back to your days at CMS, and even before that?
Kang: 40 years ago I was a geriatrician up in Boston, and actually did home visits before anyone ever knew what a home visit was. For about 10 years, I was running a group practice, doing that, caring for people in nursing homes, in the home etc.
Then, as you said, I went to CMS. I was the first and longest-serving chief medical officer at CMS. I actually was responsible for the conditions of participation, so we regulated the home health agencies.
From there I went to Cigna for about nine years, so I certainly understand the health insurance side. I was their chief medical officer.
Then I went to Walgreens, where I ran all their clinics. They had about 800 clinics around the country. I learned about consumer health and consumerism from a retailer.
Then I went to ChenMed, a private medical group that takes care of the elderly patients and they deliberately locate their clinics in low income areas. Now, I’m CEO of WellBe Senior Medical, which we’ll get into. I’ve seen health care from the retailer’s perspective. I’ve seen it from a health insurance perspective. I’ve seen it from a federal perspective. I’ve seen it from the provider perspective, certainly in the home.
How do you think home-based care, in general, has changed since your time at CMS? Obviously, COVID accelerated things, but where have things changed and where have things stayed the same?
I was at CMS from 1995 to 2002. Let’s go by segment or sector.
Home health agencies existed then, and it was covered by Medicare. I think the big difference between then and now was the implementation of OASIS, we actually did the rules for that. It basically changed home health from a fee-for-service per-diem model into a bundled or capitated model, similar to a hospital DRG episode. I think that was a big change for home health agencies.
When I look at home care, or personal care, that largely hasn’t changed. The issue there has been, who’s going to pay for it? The big difference, probably, in the last maybe 10 to 15 years is that Medicaid, state agencies, have actually started paying for it, as part of an effort to keep people out of nursing homes and in the home. You can get personal care assistance in many states, not all states. The goal there is to provide those personal care services to keep people out of nursing homes.
Durable medical equipment in the home is largely unchanged. Home infusion has changed a fair amount because there are more drugs that can be delivered at home. Otherwise, from a reimbursement perspective, it hasn’t really changed that much.
Hospice in the home has not particularly changed that much. There have been some variations around cost qualifications, how to get into hospice and how long you’ve been in hospital, but in general, not much. That’s from a traditional Medicare perspective.
There has been an increasing amount of efforts by Medicare Advantage plans to step up and provide what they’re calling transitions of care programs, or post-acute care programs. Basically, following the hospitalization if someone doesn’t qualify for skilled home health, but they still need some transitions of care support. The last big change, which is fairly recent – let’s call it the WellBe Senior Medical model – is primary care or longitudinal care in the home. It’s difficult to do in Medicare fee-for-service. It can be done, but I think that’s largely accelerated by Medicare Advantage plans.
A long time ago, home-based primary care was the norm. Then for a while it went away because it was more viable if 15 or 20 patients came into one place, as opposed to you going to all of the patients. What made that viable again, as a business model?
If you look at Medicare fee-for-service reimbursement, in order to economically make home-based primary care work, back then, you would have to do maybe 12 visits a day. This is a little difficult with the drive times and everything.
Under current Medicare rules, you might be able to get around eight to 10 visits a day because now Medicare’s starting to pay for care coordination visits and post-hospitalization visits. The big difference for WellBe is that we are only doing four to five patient visits a day. That’s because the patients who are really sick, they really need it.
The big difference is the introduction of a value-based model. We are not actually dependent on fee-for-service billing. We are, essentially, both the provider and the payer. We’re economically responsible for the hospital bills, the radiology bills, the specialist bills. That’s a value-based model or a full risk model. We can make it work because we’re prepared to spend the time with the patient and keep them healthy and out of the hospital. We make money by keeping people healthy and out of the hospital. It’s completely flipped. In the fee-for-service world, you make money by just seeing as many patients as you can a day, but that’s not necessarily good for the patient.
When you’re in a value-based care model, you’re not worried about increasing utilization too much, because you’re doing it for the patient. You’re not worried about overutilization or underutilization.
It’s interesting, people do get a little more worried about underutilization. A lot of health policy experts will estimate anywhere from 40% to 60% of the care that’s occurring in this country is either unnecessary, avoidable or due to error. We’re really not at risk of doing too little care. From our perspective, the goal is to provide as much primary care as possible for the avoidance of multiple emergency room visits, multiple hospitalizations.
Last time we spoke, you wanted WellBe to be the general contractor of home-based care. Can you explain what you meant by that?
From a consumer’s perspective, there’s skilled home health, there’s home care, DME, home infusion, hospice, Meals on Wheels. It’s a plethora of things. The challenge, from a customer’s perspective, is how to orchestrate and organize. Many of these things actually need a doctor’s order. For personal care, you need a functional assessment from a physician to qualify.
In many ways, groups like WellBe are essentially that physician, nurse practitioner, quarterback. I use the word general contractor. We’re like the advocate and navigator, out of all of those things that can be done in the home. When you’re building a home, you’ve got plumbers, you’ve got electricians, you’ve got masons. You’re not an expert, so you hire a general contractor to figure all that out. We can fill that role for the consumer.
Joining with primary care providers, whether it be regular primary care or home-based primary care, seems like an option for home health providers to start dipping their toes into risk.
I think that’s correct, but I will just say it’s going to take a while.
In Ohio, for example, we have 30,000 members or so. From a home health agency’s perspective, that’s just a really small drop in the bucket of the available lives, or members, that they’re trying to serve. I don’t think, right now, we’re large enough to have a really exclusive arrangement and make it worthwhile for a home health agency.
I think there is an opportunity for home health agencies to get in this value-based world. There’s this concept in value-based care of an episode. When you think about it under the Oasis, payment, that’s an episode of care, post-hospitalization. One of the potential outcomes of that episode of care is if you do a really good job, you can actually lower hospital readmission rates. I do think there are opportunities for home health agencies to basically say, if we can lower your hospital readmission rates, let’s actually gain share in some of those savings. I think there are home health agencies that are beginning to move in that direction.
What do providers get wrong sometimes about the way payers think?
I’m not sure they get it wrong. I think it’s a little more of trying to figure out how to best kind of talk in their language. It’s trying to figure out the outcome that the payers really care about. From a home health agency perspective, they care about readmission rates and lowering that, so that’s an opportunity.
From a personal care standpoint, there’s been a lot of progress here because the payer there for a lot of this is Medicaid. They care about keeping people out of a nursing home. If you’re going to work with the Medicaid payer, you’d say your nursing home rate admission rate is Y. We start serving the patients and can reduce that by 10%. Is there an opportunity then for [the home care provider] to share in some of those savings?
It’s more about figuring out what the payers really care about and then helping them solve that problem.
Do you have a prediction for the next five years for the home-based care space at large?
Lots of new entrants coming in, which is good. I think everyone deserves a WellBe-like model whether we’re delivering it or someone else is delivering it. I think there are many of our fellow companies that are also going into Medicare fee-for-service, but they’re doing it through the ACO REACH program. That makes a ton of sense. We’ve decided not to do that, but at some point we may come around to that. I do think applying this model to adult Medicaid, in particular the long term-care population, makes a ton of sense.
Companies featured in this article:
