onehome — a home-focused post-acute care company that operates under a full-risk model — is gearing up for a major expansion push. And it’s doing so with the support of one of the most innovative Medicare Advantage (MA) plans in the country.
The Miramar, Florida-based onehome announced Monday that it’s partnering with next-generation MA plan Devoted Health to coordinate and deliver a wide variety of home health services in Arizona, Ohio and San Antonio, Texas. In addition to those markets, onehome’s current footprint also includes Florida and New York, Dr. Joe Mayer, the company’s president, told Home Health Care News.
“We’re in a pretty rapid expansion mode, given the tailwinds [behind in-home care] and our partners wanting to do more in the home,” Mayer said. “We’re expecting to be in a number of more markets before the end of the year.”
In many ways, onehome purposely blurs the lines between the traditional convener and provider.
Similar to most conveners, onehome teams up with payers by entering into full-risk capitation agreements for skilled home health care, durable medical equipment (DME) and home infusion services. Instead of exclusively focusing on utilization and network management, however, onehome also delivers the actual home-based care themselves through its vertically integrated provider portfolio.
In other words, the company is an at-risk provider that’s overlaid with convener-like capabilities, Mayer explained.
“Rather than being what I would call a middleman, managing a network, doing utilization management, re-contracting with national providers, we are a vertically integrated provider,” he said. “We’ve got our own home health agencies, our own 40,000-square-foot DME warehouse in the markets we’re in. We’ve got our own fleet of vehicles. We’ve got our own pharmacies.”
Meanwhile, Devoted Health is the Waltham, Massachusetts-based MA plan that launched in October 2018. Even then, the MA startup — one of the first organizations to popularize the term “payvidor” — had publicly discussed how it was prioritizing the home to lower costs and achieve improved health outcomes.
Devoted Health has raised more than $812 million since its formation, with financial backers including venture capital powerhouse Andreessen Horowitz and Frist Cressey Ventures, the health care investor whose other partnerships include Monogram Health and Ready.
The fast-growing MA plan was founded by brothers Ed and Todd Park. Before starting Devoted Health, Ed Park previously served as Athenahealth’s COO and chief technology officer, while Todd Park served as U.S. chief technology officer under the Obama administration and co-founded both Athenahealth and Castlight Health (NYSE: CSLT).
“Our members’ health and quality of life depend on access to safe and necessary care, and, increasingly, we are looking to the home as the best environment for healing,” Ed Park, now Devoted’s CEO, said in a statement. “We’ve partnered with onehome to deliver their high level of care as we expand into Arizona, Ohio and Texas, confident that the unique model they’ve built and their proven track record of moving post-acute care into the home couldn’t be of greater value at this time for serving the needs of our new members.”
Devoted Health did not respond to an HHCN request for comment.
A big differentiator
Initially, the partnership between Devoted Health and onehome will include about 3,500 MA enrollees across their three markets. That figure will likely increase in months to come, as the two partners are already in talks about launching in even more markets as Devoted Health and onehome each grow.
In total, onehome managed just under 1 million lives across its footprint, according to Mayer. Of those individuals, about 100,000 or so will actually need home health, DME or home infusion services annually.
A big differentiator for onehome is the fact it essentially has zero Medicare fee-for-service volume, mostly contracting with “a nice blend” of Medicare Advantage and managed Medicaid, Mayer noted.
“Even though we have these agencies that are licensed under Medicare and Medicaid, we’re not … actually out there marketing for orders or billing Medicare beyond what we have to do to maintain our license, which is a few cases a year,” he said. “We’re able to just get this really tight, really clinically oriented relationship between the provider and the risk-bearing entity.”
The newer direct-contracting models created by the U.S. Centers for Medicare & Medicaid Services (CMS) under the Primary Care First initiative have presented other opportunities of late.
Broadly, direct contracting allows CMS-approved direct-contracting entities (DCEs) to bear varying degrees of risk to manage certain populations. There are three direct-contracting models overall, with each designed to theoretically reduce the cost of care in traditional Medicare with a more value-based approach.
“I think the future is here, in the sense that we’re already launching with a few DCEs,” Mayer said. “And I think our model is uniquely well-suited for partnering with the DCEs.”
CMS recently announced it has suspended the application process for the second year of the direct-contracting models. That won’t affect onehome’s plans in the present, as it is simply focused on getting its current DCE relationships right before considering any further work in that payment environment.
“I’ve almost had to put some of those guys on hold because it’s such a new program,” Mayer said. “We want to ramp up and do it the right way with these first couple partners who we’ve already signed up.”
A new kind of provider
After working as a physician at Mount Sinai Medical Center in New York, Mayer founded a health care IT company called Cureatr, which he eventually sold. After doing so, he partnered with a PE company called WayPoint Capital Partners to build a new kind of post-acute care provider.
The objective, he recalled, was to create something similar to ChenMed or Oak Street Health (NYSE: OSH), but with the core of the company being home-based post-acute care instead of primary care.
“We kind of took a page out of that playbook and said, ‘Let’s, you know, look at what’s working really well as far as value-based care in primary care,’” Mayer said. “Then let’s apply that model in the home-based care and post-acute care space.”
Mayer and WayPoint looked at about a dozen organizations seeking the right platform investment, then discovered onehome — what was then a four-year-old company — toward the end of 2018.
“We kind of had that ‘ah ha’ moment, because their model was pretty unique,” Mayer said. “It was very forward-thinking. So we — myself and WayPoint Capital Partners — recapitalized the business and partnered with the founders.”
Moving forward, other up-and-coming MA plans will likely seek out home-based care providers like onehome with greater frequency in effort to win market share from the six big national players. Despite the emergence of several MA “disruptors,” UnitedHealthcare, Humana and CVS Health alone control more than half of the MA market.
More than 40% of Medicare-eligible beneficiaries are enrolled in an MA plan in 2021, up from 32% just five years ago, according to data from The Chartis Group.
Smaller MA plans partnering with in-home care innovators isn’t just about winning market share, though. It’s also a necessity, as in-home care often helps plans lower their per member per month (PMPM) costs.
“If you’re getting started with a relatively small number of members, the admin costs to medical-expense costs, the PMPM ratio, it’s much higher,” Mayer said. “So you have to innovate, you have to do things that are going to help you manage the cost of care better.”
That’s exactly what onehome expects to do with Devoted Health moving forward.
The opportunity to build something with Devoted from the ground up is particularly compelling, Mayer added.
“Historically, we’ve come into a market where the payer was already established, had a lot of members, had a big, fragmented network of disparate home health providers, DME, infusion,” he said. “And it’s sort of more like fixing or righting the ship, then being able to do all the more exciting clinical programs, the value-based [initiatives].”