Latest / Becker’s Healthcare Podcast / Stopping Post-Acute Leakage: The Business Case for DME Joint Ventures

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Stopping Post-Acute Leakage: The Business Case for DME Joint Ventures · Becker’s Healthcare Podcast

• 0:00
  Hello, and welcome to the Becker's Healthcare Podcast.
• 0:02
  My name is Chanel Banger. And today I'm
• 0:04
  excited to speak with Ann Cornelius, the Chief
• 0:06
  Revenue Officer of DASCO Home Medical Equipment. And
• 0:09
  today we're gonna talk about stopping post acute
• 0:12
  leakage, the business case for DME joint ventures.
• 0:15
  Anne, thank you so much for joining me
• 0:16
  today. Thanks for having me, Chanel. Perfect. Well,
• 0:19
  to get us started, could you please introduce
• 0:20
  yourself and give us an overview of your
• 0:22
  work in healthcare? Sure. My name is Anne
• 0:24
  Cornelius and I'm the Chief Revenue Officer at
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  DASCO Home Medical Equipment.
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  We're a provider of DME, and we've been
• 0:31
  partnering with health systems for nearly four decades
• 0:34
  now. And we're focused on creating seamless transitions
• 0:38
  of care from hospital to home and then
• 0:40
  also providing ongoing support for patients that need
• 0:43
  DME equipment.
• 0:45
  Got it. And now that we have a
• 0:46
  sense of your background, from your perspective, what's
• 0:49
  driving the spike in interest in DME joint
• 0:51
  ventures right now, and how is it impacting
• 0:53
  health care organizations?
• 0:55
  Yeah. Chanel, we're seeing, increased interest driven by
• 0:58
  a few factors.
• 1:00
  One is bed capacity and throughput
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  pressures that the health systems are dealing with
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  right now as patient population
• 1:08
  surge.
• 1:09
  I was listening to someone earlier today talking
• 1:12
  about how five minutes, ten minutes all add
• 1:15
  up to hours, which add up to days,
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  which add up to weeks. So it's not
• 1:20
  gonna be one single solution that solves those
• 1:23
  capacity constraints,
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  but DME and and seamless transitions of care
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  from hospital to home are gonna be incredibly
• 1:31
  important
• 1:32
  in bed capacity management and driving efficiencies.
• 1:36
  I think the other thing is the connection
• 1:38
  with readmission reduction and value based care.
• 1:41
  You know, a lot of people are looking
• 1:43
  to
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  achieve the desired outpatient outcomes or clinical outcomes,
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  and our patients on DME therapies are chronically
• 1:52
  ill. They're managing a complex medical condition at
• 1:56
  home, and I think the,
• 1:58
  value based care in achieving those outcomes is
• 2:01
  going to require a multidisciplinary
• 2:03
  care team.
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  And it's as a DME provider, it's really
• 2:07
  exciting
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  to see us finally be considered an important
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  part of that team.
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  You know, we're going more from product delivery
• 2:15
  to clinical enablers
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  where we're making sure that medical providers are
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  able to give the right care at the
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  right time and in the right place.
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  And I think the last thing I would
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  mention is the patient experience.
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  You know, patients
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  often associate their medical equipment with the person
• 2:33
  that prescribed it. And so improving coordination,
• 2:37
  reducing gaps,
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  better communication,
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  and speed to delivery
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  can all improve that patient satisfaction
• 2:44
  score.
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  So when a health system is considering its
• 2:47
  options, how should leaders decide between building DME
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  capabilities in house, partnering through a joint venture,
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  or relying on a preferred network?
• 2:56
  Yeah. This is a great question, and there's
• 2:57
  a lot of options out there.
• 3:00
  The most common model today is a preferred
• 3:02
  provider network.
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  The challenge with this model is that it's
• 3:07
  extremely fragmented.
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  Care teams are managing multiple vendors.
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  They all have their own processes and sets
• 3:14
  of rules that they the care teams have
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  to make sure that they're following.
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  And so it creates a lot of inefficiencies,
• 3:21
  a lot of gaps, and then, of course,
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  a lot of frustration.
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  Some health systems are choosing to build their
• 3:28
  own DME operation.
• 3:30
  This gives them control,
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  helps with standardization
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  in that process,
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  but DME is operationally
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  complex relative to the revenue it generates.
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  Billing, logistics,
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  regulatory
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  requirements
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  are all very different for DME than they
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  are for other health care,
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  areas, and it's difficult to achieve the scale
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  needed to be effective and efficient
• 3:55
  without that expertise.
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  So I think another interesting model and something
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  we've had experience doing is the joint venture
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  model because it offers a good middle ground.
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  It allows hospitals to to maintain control,
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  branding,
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  and obviously get the standardization
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  they're looking for
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  while bringing in a DME partner with the
• 4:16
  expertise to manage operations
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  and drive growth.
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  That combination will create efficiencies,
• 4:22
  improve patient experience and outcomes,
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  and it'll also allow systems to capture additional
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  revenues
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  and expand its footprint into the post acute
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  area with very little risk and very little
• 4:34
  capital investment.
• 4:36
  Absolutely. And so if a health system does
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  go the partnership route, what should they look
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  for when evaluating a partner, and what are
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  some of the red flags that they should
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  keep an eye out for?
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  First and foremost, I would say look for
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  someone with expertise.
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  So asking questions like how long have they
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  been doing DME,
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  what's their scale, and what's their specific experience
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  in joint venture partnerships.
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  Make sure that they have references. If someone
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  tells you they can't give you partner references,
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  that's a huge red flag.
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  Second is performance, and I would look at
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  their financials
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  over, you know, multiple years or have make
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  sure they have multiple case studies that they
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  can provide
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  demonstrating their strong operators.
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  Strong operators will have
• 5:22
  multiple years in double digit margins.
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  Third is quality. What metrics are they tracking,
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  and what are they willing to share?
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  These metrics should include everything from patient satisfaction
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  to clinical outcomes,
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  and then they should also include payer audit
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  performance.
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  And finally, cultural fit. It's important that both
• 5:44
  parties share similar values and mission, a similar
• 5:48
  approach to collaboration
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  and innovation.
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  There needs to be a shared commitment
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  to the long term success of the partnership.
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  So you outline a roughly twelve week path
• 5:59
  to go live. What are the critical path
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  items that determine whether a joint venture hits
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  that timeline, and what commonly slows teams down?
• 6:07
  Yeah. So we typically start by presenting the
• 6:10
  JV structure and a financial
• 6:12
  forecast
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  to hospital leadership or a board.
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  Once there's alignment, we usually move into an
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  LOI or a term sheet,
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  which typically triggers a due diligence process.
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  And then simultaneously
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  to that due diligence process, we're generally
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  drafting agreements
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  and building out the detailed implementation
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  timeline.
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  In terms of timing, potential delays on the
• 6:37
  health system side
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  usually include things like changes in leadership or,
• 6:43
  competing priorities can sometimes change the timeline.
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  For DMEs,
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  sometimes there's a payer contracting.
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  Sometimes there's payer contracting, which can require additional
• 6:55
  steps, though we've not experienced
• 6:57
  significant delays in that process.
• 7:00
  Got it. Well, Anne, I wanna thank you
• 7:01
  for your time today. But before I let
• 7:02
  you go, is there anything else that listeners
• 7:04
  should know?
• 7:05
  Yeah, Chanel.
• 7:07
  I'd just like to emphasize that
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  DME is one of the most underleveraged
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  areas in health care today.
• 7:13
  It sits right at the transition from hospital
• 7:16
  to home
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  where a lot can go wrong if it's
• 7:19
  not managed well.
• 7:21
  Health systems have an opportunity to not only
• 7:23
  improve the patient experience and outcomes,
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  but also diversify its revenue.
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  And when done right, a DME joint venture
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  isn't just about medical equipment.
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  It becomes a strategic extension of care into
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  the home.
• 7:37
  Well, that's a great note to end on.
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  And I wanna thank you once again for
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  your time and insights today. And we also
• 7:43
  wanna thank our podcast sponsor, DASCO Home Medical
• 7:46
  Equipment. You can tune in to more podcasts
• 7:48
  from Becker's Healthcare by visiting our podcast page
• 7:50
  at beckershospitalreview.com.