Amedisys (NASDAQ: AMED) subsidiary Contessa Health is seeing strong patient engagement for its expanded home-based palliative care program, which the company launched in January in partnership with Mount Sinai Health System in New York.
Tennessee-based Contessa Health provides a continuum of home-based care, including high-acuity services such as hospital-at-home and skilled-nursing-at-home services. Home health and hospice provider Amedisys acquired the company last June for a price tag of $250 million. The deal has since opened doors to new mergers and acquisitions, as well joint venture opportunities for Amedisys.
The Mount Sinai partnership marks Contessa’s first risk-based palliative care contract, which is reimbursed through Medicare Advantage. With this in place, the company now offers a full continuum of home-based care.
The program is off to a strong start, according to Aaron Stein, COO of Contessa Health, who said the model will springboard similar partnerships down the road.
“We are seeing early positive patient engagement trends in this program, which will be important beyond this partnership as we expand this business line to two new geographies and contract structures that have increasing levels of financial risk,” Stein said at the Hospice News Palliative Care Conference in Chicago. “This strategy is truly one of a kind in the industry, and a major reason for why we see tremendous opportunity to capitalize on partnerships going forward as the only operator to provide an integrated home care offering.”
Amedisys defines palliative care as “life enhancing care to be provided to patients with serious illness,” Stein told Hospice News, with a multidisciplinary approach that includes addressing patients’ psychosocial and spiritual care.
The company is in the process of building a joint venture with Detroit-based Henry Ford Health System that will be similar to the Mount Sinai relationship. Amedisys Chairman Paul Kusserow said last November that the company has a pipeline of more than 13 health system joint ventures, which could potentially double Contessa’s footprint.
In terms of M&A, utilizing Contessa’s new palliative care model contributed to strong top-line growth potential heading into the second quarter of 2022, according to Amedisys CFO Scott Ginn. The program helped to identify patients that wouldn’t normally land in the home health care setting.
Newly appointed Amedisys President and CEO Chris Gerard is bullish on expanding the company’s palliative care capabilities, Stein told Hospice News at the conference. Gerard took the helm following Kusserow’s recent retirement as CEO, though he remains chairman.
“Chris Gerard sees palliative care as really the linchpin of the businesses. And I think just generally a feeling if you talk to your clinicians — especially in hospice, certainly in home health — they may mention live discharge rates. There’s a lot of patients that fall through the cracks, because there’s not that longitudinal model naturally in place,” Stein said. “So as Amedisys is thinking about palliative care, it really is inserting this care model to be able to function better for patients — where patients are not seeing 30 doctors in their last year of life. We’re able to consolidate that experience, and at least have all of the different parties talking to each other.”
Company-wide, Amedisys saw its net service revenue rise to $545.3 million in Q1, compared to $537.1 million in the prior year’s quarter. The hospice segment accounted for $193.1 million in Q1, a modest increase from $191.5 million in 2020.
Mortality rates for the company’s hospice patients were higher than historical averages as the year began, but they started to normalize in February. This trend impacted the segment’s Q1 earnings.
Despite these pressures, the company’s first quarter $66.3 million EBITDA demonstrates the company’s ability to stay nimble in a changing environment, Brian Tanquilut, equity analyst for Jeffries Financial Group, indicated in a research note.
“Growth should accelerate going forward as hospital volumes/discharges pick up, staffing trends continue to improve, and the site of service shift thesis plays out and drives incremental market share shifting from nursing homes to high quality providers such as [Amedisys],” Tanquilut said in the note.
Companies featured in this article:
Amedisys, Contessa Health, Henry Ford Health System, Jeffries Financial Group, Mt. Sinai Health System
