State of play: Value-based care for seniors
Investors' senior care playbook is ever-changing amid the growth and maturation of Medicare Advantage, which is driving the health care industry's broader move and bigger spend toward value-based care.
Driving the news: Capital is flooding into early-stage startups experimenting with various approaches. "The cool thing about value-based care?" General Atlantic managing director Robb Vorhoff says. "There’s hundreds of business models."
- Senior care-related startups commanding fresh funds this year include CareBridge, Upward Health, Biofourmis, ConcertoCare, and Vytalize Health. Others, including Wellvana and Lifespark, are seeking investment.
- Simultaneously, we've seen many PE bets around Medicare Advantage primary care, with the ecosystem spanning public companies including Cano Health and Oak Street Health and privately held players like Bain Capital's InnovaCare or Kinderhook Industries' Physician Partners.
Reality check: Scaling remains a challenge for new models looking to shake up the senior care market.
- "There are a lot of options out there that you don’t know about," Town Hall Venture’s Andy Slavitt says. "Some are the best-kept secrets; some are not worth knowing about."
Meanwhile, private equity investors have deep pockets in many traditional home care models that remain predominantly fee-for-service.
- In an effort to take more risk, sponsors are signing partnerships that leverage their in-home patient relationships.
- Consider Centerbridge Partners and Vistria-backed Help at Home, whose in-home caregivers identify preventative measures and risk factors to help seniors coordinate with other professionals that are taking capitated risk.
- "We’re not providing the primary care, but we can be the eyes and ears in the home that are letting [provider and payor partners] know what that patient’s condition is on a daily basis," Centerbridge senior managing director Jeremy Gelber says.
- Advent International managing director Carmine Petrone thinks about his portfolio company AccentCare — which is working with benefit managers — as a logistics provider that can curate all the care services that go into the home.
- "If you want other clinical services that we don’t provide, we can be on the hook for finding that in our network," Petrone says.
Yes, and: Both investors and traditional home health players are leaning into integrated dual-eligible programs like The Program of All-Inclusive Care for the Elderly (PACE), a fully capitated, comprehensive care substitute for nursing home care.
Between the lines: Companies are bringing more offerings under one house.
- When it comes to risk-bearing primary care, for example, Welsh, Carson, Anderson & Stowe vice president Ann Hickey sees a large omni approach opportunity.
- "I do think we’ll start to see some of the more clinic-based platforms develop in-home capabilities in addition to virtual capabilities," she says.
- Gelber anticipates more consolidation of various services in the home or services and technology in the home. (Consider Amedisys buying Contessa Health, a hospital-at-home company, or ModivCare buying VRI Intermediate Holdings, a provider of remote patient monitoring.)
- Although Petrone isn't typically a believer in a service provider owning and incubating its own technology, he sees a big investment opportunity around technology that optimizes labor, such as remote patient monitoring.
The other side: Caregivers are also getting more attention.
- Duos, which connects older adults and caretakers to dedicated personal assistant and a constellation of service providers, landed $15 million in Series A funding in April.
- There's also been an uptick in activity (from firms like DW Healthcare Partners and Linden Capital Partners) around self-directed home care, which enables the compensation of family caregivers of Medicaid-eligible patients.
The bottom line: We're going to see a ton more capital, M&A and company creation focused on rearchitecting senior care.