Latest / CareTalk: Healthcare. Unfiltered. / Why High-Acuity Care Is Moving Home w/ Lon Hecht, CEO, Care2U

Transcript

Why High-Acuity Care Is Moving Home w/ Lon Hecht, CEO, Care2U · CareTalk: Healthcare. Unfiltered.

0:00
David: Every year, millions of Americans end up in emergency rooms and hospital beds for conditions that could be treated just as well and far more safely in their own homes.
0:10
David: So why does care still default to the most expensive, most disruptive setting possible and who's actually doing something about it?
0:26
David: Welcome to Care Talk Executive features a series where we spotlight innovative companies and leaders working to advance the healthcare field.
0:33
David: My guest today is Lon Hecht.
0:35
David: He's CEO of Care2U, a New York based provider of ER and hospital level care in the home with 25 years of experience spanning pharma, telehealth, value-based care, and home-based care, including his time as SVP of Growth at Optum Home and Community Care Lawn brings that rare combination of startup hustle and enterprise scale perspective to one of healthcare's most important and fast moving shifts.
1:00
David: Lon, welcome to Care Talk.
1:02
Lon: Thank you David.
1:03
Lon: It's great to be here.
1:03
Lon: I'm a big fan.
1:05
David: Outstanding.
1:06
David: You know, Lonnie spent about 25 years, we'll just round it.
1:09
David: Uh, moving across some of the biggest platforms in healthcare.
1:12
David: I'm talking pharma, telehealth, value-based care, Optum, that's the biggie.
1:16
David: So what drew you to home-based care and why are you betting your next chapter on that?
1:22
Lon: Well, I think home-based care is really what the next chapter is.
1:25
Lon: That's where care is really starting to move.
1:27
Lon: So I'm a big fan of skating to where the puck's gonna be, not where the puck has been.
1:31
Lon: So I think that's one big thing about it.
1:33
Lon: The other one was when I was at Optum and Home and Community, the division I.
1:37
Lon: I, I felt like I had a need that was being underserved.
1:41
Lon: We were selling to external payers, taking on full capitated risk.
1:45
Lon: And one thing that Optum's very good at, at would be things like star ratings and risk adjustment and things like that.
1:51
Lon: But when it comes to levers to actually pull in the expense management side.
1:56
Lon: They're few and far between.
1:57
Lon: So I had a pain, I actually got a call from the, um, the investors that are behind Care2U.
2:03
Lon: They explained what they're doing and it just really resonated with me and it just felt like it absolutely was my next chapter.
2:09
David: So I'm sure that a lot of people, you know, in, in your seat at Optum previously in other places around the country had looked and said, yeah, this is a real problem.
2:16
David: I wish someone would, would do something about it.
2:19
David: Um, and I understand, you know, then you went to Care2U.
2:22
David: For something new and different, and I'd love to hear what's different about the model, but also what makes it better.
2:28
Lon: Yeah, sure.
2:29
Lon: So think of us as kind of like a medical group that brings high acuity care into the home.
2:34
Lon: We get a referral, whether it's from a patient, a provider care manager, home health, wherever that may be.
2:39
Lon: We dispatch into the home, a clinician typically within two to four hours of getting notified, and we work up that patient and then we bring an ER physician or hospitalist on concurrent telehealth.
2:50
Lon: So you have two providers in a visit.
2:52
Lon: So the models that are out there today, I'd like you to think about it in two different ways.
2:56
Lon: On one side, you may have urgent care at home type of vendors, we are higher acuity than that.
3:02
Lon: We're next level higher acuity.
3:04
Lon: And you, and when you look at them, they're typically escalating 25 to 35% of patients to the er.
3:10
Lon: We are next level higher acuity, and we're escalating closer to 10% to the er.
3:14
Lon: So the value proposition is very different.
3:16
Lon: But then on the other side, you have these hospital at home programs.
3:20
Lon: And I think hospital at home is really interesting, but it was more of a COVID capacity play and it's hospital control.
3:27
Lon: So what happens is a patient actually has to go to the er, they have to put all that time into the er, meet clinical criteria than an administrator has to decide.
3:36
Lon: I'd rather send them home than fill that bed.
3:39
Lon: And that just doesn't happen that often.
3:41
Lon: So what we've done is we've really turned this model on its head, and what we do is the ER at home or ED avoidance visit is really the tip of the spear.
3:49
Lon: We go into the home.
3:50
Lon: If we can treat that patient in one visit, perfect.
3:53
Lon: If they need ongoing care and they hit MCG criteria.
3:57
Lon: We can do a full admission.
3:58
Lon: Now keep in mind it's not a hospital admission because we're not a hospital, but we can admit them to our service right in the home and treat them as if it was a hospitalization in the home.
4:08
Lon: Um, and what's really beautiful about this is.
4:11
Lon: If you look at like the hospital at home waiver model out there, there are some cost savings, but not very substantial, and it's really just for fee for service.
4:18
Lon: Medicare.
4:19
Lon: Our model is for all payers.
4:21
Lon: It's for all risk-bearing entities.
4:23
Lon: We've really aligned ourselves more with the folks.
4:25
Lon: If you think about healthcare, you think of follow the dollar.
4:28
Lon: Who controls the dollar?
4:29
Lon: Payers risk-bearing providers, they tend to control the dollar.
4:32
Lon: So what we're doing is we're finding a way to provide this care to them in the home, and we do it at a fraction of the cost.
4:38
Lon: So if you look at Medicare, our costs are typically about a third of what a hospital utilization would be.
4:44
Lon: If you look at commercial, because it's so much more expensive, it's closer to a sixth of the cost.
4:48
Lon: So it's a very different model that we do, and we bring really high level capabilities into the home.
4:53
David: So, yo Lon, I know a lot of people have had this experience of themselves or with older relatives or something.
4:58
David: So let, let me actually just walk you through a scenario that I was dealing with, uh, recently, and maybe you can talk about, you know, what might have been different if, if anything.
5:05
David: So, sure.
5:06
David: I was, um, I was dealing with some, uh, some, some older folks, uh, in their, in their mid eighties.
5:11
David: Uh, husband and wife and a husband has the sort of things that someone in their mid eighties might have dealt with, has had cancer in the past, you know, various, various things.
5:20
David: And, um, you know, we had kind of a little bit of a fever wasn't feeling well, it was about 3 34 in the afternoon.
5:27
David: They live in a senior.
5:28
David: Home that actually has, um, a medical clinic with an NP in it.
5:34
David: They, they didn't wanna call that person 'cause they thought, well if they do call 'em, they don't really know 'em and that we couldn't get downstairs so easily and then they're probably gonna get transported anyway.
5:43
David: So they sort of tried to wait it out and then, and then a couple hours later, uh, you know, the wife basically.
5:49
David: Said, I, I got called 9 1 1 and uh, they ended in the hospital and they did things that I would say are done in a hospital that you wouldn't do, like, you know, that you probably can't do, like maybe you can 'cause a couple CT scans, blood tests, a few things like that.
6:05
David: And, um, you know, through my intervention ended up being discharged, uh, at two or three in the morning rather than, you know, being admitted and then potentially having some of the issues that this person's had when they're in a hospital for a long while.
6:16
David: So I've just given you the outline, but I can tell from your space, see sounds similar.
6:20
David: So can you help, help me out with this, what might be different?
6:24
Lon: Yeah, absolutely.
6:25
Lon: So we do work with a lot of senior communities.
6:28
Lon: Um, uh.
6:29
Lon: Assisted living communities, things of that nature.
6:32
Lon: They typically have either providers on staff or they have maybe home-based care providers that would come in there and they have certain capabilities, but they typically don't have urgent to emergency level capabilities in there.
6:43
Lon: So in a case like this, a very simple call to Care2U.
6:46
Lon: We could have been in their community, in their room two to four hours, have been able to manage things, stat labs, we can do imaging, we can do oxygen concentrators.
6:56
Lon: We can do all kinds of things in there To be able to manage that patient in the comfort of their, their specific room and very likely would've avoided that escalation to the er.
7:06
Lon: And what gets really complicated is when a patient goes to the er.
7:10
Lon: That's one step.
7:11
Lon: But very often, especially when they're seniors, they're gonna get put in observation level care, at least, if not a hospitalization.
7:18
Lon: And it just goes on and on and on.
7:20
Lon: And then they're around a lot of sick people, which is the last place you want to be.
7:23
Lon: So we do work with a lot of communities.
7:25
Lon: We work with a lot of home health providers.
7:27
Lon: Believe it or not, we work with a lot of hospitals, um, because there's a lot of value that we can provide for them.
7:32
Lon: I'll just mention one.
7:34
Lon: So readmissions are such an issue.
7:36
Lon: Right for hospitals.
7:37
Lon: And if you think about the way they, they approach things now, it's more of like a population health based approach.
7:42
Lon: They have to, they have to pay a lot to try and figure this out.
7:45
Lon: You know, what hospitals can do is if they own a Medicare penalty diagnosis, they could send a patient home with a bracelet that says, call to Care2U.
7:52
Lon: If you have any kind of urgent need we can deploy in the home only on those that have needs.
7:57
Lon: We could probably stop about 90% of those readmissions from happening.
8:00
Lon: So it gets very specific.
8:01
Lon: So there's a use case for everyone.
8:03
Lon: It's just knowing.
8:04
Lon: What is the value we can provide to that specific person?
8:07
David: And would the hospital be interested in preventing that initial admission or er, or observation visit or only in the, the read the readmission penalty part of it?
8:17
Lon: So, so I think there are a number of different things.
8:19
Lon: It depends on the hospital.
8:21
Lon: So I, I don't want to pretend that we are absolutely in alignment a hundred percent of the time, but when they were in value-based care contracts.
8:29
Lon: This gets really interesting to them because the cost is substantially lower.
8:33
Lon: So they really like us for their value-based care lives.
8:35
Lon: They really like us for readmissions.
8:37
Lon: They like us for their employees typically.
8:40
Lon: They also like us in the sense that you have, you have patients that end up getting admitted and they're in a bed and they're taking up a bed and they're there for three days.
8:48
Lon: Your DRG is safe.
8:50
Lon: The problem is you may have them there 5, 6, 7, 8 days 'cause they need choice of IV antibiotics or Lasix or things like that.
8:56
Lon: We can manage that for them in the home and they can turn that bed.
9:00
Lon: So there's a lot of value that we can provide for a hospital.
9:03
Lon: It's just aligning on what's important to them.
9:05
Lon: I don't wanna pretend that it, it's always gonna make sense, but I do think, and I, I, you know, I'm not gonna get into depth in this here.
9:11
Lon: I do think there's a model and I believe that I can do this, where I can pull the payer and the hospital and Care2U together.
9:18
Lon: To put a model aligned that makes sense for everyone.
9:22
Lon: I think there's a lot of value that can be derived from that.
9:24
Lon: I think that's where the market will go.
9:26
Lon: I think it's a couple years out, but I think in New York, especially since we've got such a good F footprint, it could be sooner.
9:32
Lon: So I, I think we'll do some really interesting things soon.
9:35
David: I wanna come back to something that you started off talking about, which is hospital at home broadly, and you know where it's succeeded and, and and where it hasn't.
9:43
David: So I've been hearing about it for a long while.
9:45
David: It sounds appealing.
9:47
David: It's been building for years in a way, but adoption's been uneven or, or low?
9:51
David: You mentioned it being kind of a, you know, capacity issue for COVID and it's really, it's not.
9:55
David: Really hospital at home.
9:57
David: It's like part of hospital at home or you know, hospital and something else that's, uh, that's going on.
10:01
David: But what is holding this movement back?
10:03
David: You know, is it a regulatory, cultural, financial, just, uh, you know, some things that, that the hospitals are typical, uh, typically doing.
10:10
David: Why, why haven't we seen it go further?
10:13
Lon: I, I think it's all of the above.
10:14
Lon: Um, so I think cultural, there's an educational component that needs to be done out there.
10:20
Lon: I think it's regulatory that, that hospital-based model, that was the CMS waiver program, there was so much uncertainty with that.
10:27
Lon: Now, keep in mind, once again, that is for fee for service, Medicare only.
10:31
Lon: There was a lot of, um, uncertainty about what was gonna happen with that model.
10:34
Lon: So I think that held back adoption.
10:36
Lon: The other thing is for payers.
10:38
Lon: Where do payers sit in this?
10:40
Lon: What is the value that they're getting derived, right?
10:42
Lon: Hospitals wanna make as much money as they can on hospitalizations, you know, on a hospitalization.
10:47
Lon: Payer wants to pay as little as they can.
10:49
Lon: There's gotta be a happy middle ground on what this can do, and I do think that this home-based care or this home-based ho hospitalization.
10:57
Lon: Could be the way to really solve this and really unlock a lot of value for folks.
11:01
Lon: So I, I think it's a ton of things.
11:02
Lon: I think it's, you know, the financial, like who wins in this?
11:05
Lon: And then I think it's like education.
11:07
Lon: How do people learn about this?
11:08
Lon: And then I definitely think regulatory had a lot, a lot to do with that.
11:12
Lon: And each state is very complex with their regulatory, um.
11:16
Lon: Uh, you know, the, the different, the different criteria that they have in place.
11:19
Lon: So just because we've been successful in, in one market with one model doesn't mean when we move to another market, there's now gonna have to be a little tweak to the model.
11:27
Lon: 'cause every state's a little bit different
11:30
David: as I understand it.
11:31
David: Uh, the company was founded by, uh, emergency room physicians who we kind of watch patients waiting hours and hours in an overcrowded er.
11:39
David: And by the time they got to them, it's sort of like, well, you know, you didn't really need to be here.
11:43
David: In the first place, certainly not for admission, um, but maybe even to be seen in the er.
11:48
David: Do you have a sense, I mean, we've all experienced it.
11:51
David: I gave you one example, uh, current recent one, but help, help me get an understanding of how big the problem is and what this costs are to this system.
12:01
Lon: Yeah, well.
12:02
Lon: Good question.
12:03
Lon: The problem is huge.
12:04
Lon: Um, one because it clogs up ERs and we all know, I don't wanna speculate on what er wait times are.
12:11
Lon: 'cause no matter what I say, somebody's gonna argue with it.
12:13
Lon: But at the end of the day, they are way too long and they're clogged up with so many things.
12:18
Lon: Uh, I bet 45 plus percent of the things that happen in the ER really don't even need to be in the ER in any way, shape, or form.
12:24
Lon: Huge opportunity that if you look at just, let's say 40, 45% of ER visits and then let's say 15% of inpatient, um, admissions, you're probably looking at a market size of close to $150 billion across the country.
12:38
Lon: In New York alone, probably 12, 11, 12 mil billion dollars.
12:42
Lon: So it's pretty significant.
12:44
Lon: So I, you know, I look at it as the.
12:46
Lon: Right place of service is so critically important for anything that you're doing, and we can really rightsize that, that place of service.
12:54
Lon: Um, and in doing that, you can free up the emergency room for the things that actually need to be there, that people that are coming in with these really, truly high acuity needs can be treated in a timely manner.
13:04
Lon: And, and the other thing is like, I think it helps payers also with, with some of their case, I'm sorry, providers.
13:09
Lon: Hospitals with some of their case mix as well.
13:12
Lon: Um, being able to put folks in that actually need to be there.
13:15
Lon: I think there's some value for that, especially in these overcrowded hospitals.
13:20
David: We had done some work a few years ago here, uh, in the Boston area where I'm located trying to do something about the number of, uh, unnecessary emergency room or hospital visits because the cost is high and so on, and so.
13:35
David: A lot of it was saying, well, you know, physicians have inconvenient hours and it's hard to make an appointment, hard to get in touch.
13:40
David: And so what they found though is that when they made it more convenient and had even weekend hours or evening hours and it was easy to get in, it didn't actually really solve the problem.
13:50
David: And uh, sort of speculation was, well, you know, mass General has all these ads up about how they're you now MG Beach, MGB, you know, great hospital and get the best care.
14:02
David: And when people are sick, it's sort of like.
14:04
David: But I'm gonna go there one way or the other, even though we know it's bad if you're actually running it and people don't need to be there.
14:09
David: So I think I had an assumption that, yeah, it's a problem and everybody recognizes that nobody wants to be in the emergency room, but people seem to kinda quickly jump to that anyway.
14:18
David: How does that, do you see something similar?
14:22
Lon: I, I think that people are wild that wired that way, but I think that there are things that we can do with that, right?
14:28
Lon: I mean, if you just look at the payer world, so first of all, we contract with a lot of payers and a lot, a lot of risk-bearing entities.
14:34
Lon: I think the next step is slotting Care2U, and I'll just give you an example where when you have your insurance card, it's$15 for a PCP, $30 for a specialist, 50 for urgent care, 75 for Care2U.
14:46
Lon: 150 for er, something along those lines so people understand that there are progressions of care.
14:51
Lon: I think that there are things that you can do about that.
14:54
Lon: I also think that when you look at, um, a payer risk-bearing entity, you know, they have patients that are poly, chronic, or have just specific chronic conditions, education campaigns.
15:04
Lon: If you're CHF or COPD and you're utilizing.
15:07
Lon: The ER and the hospital all the time.
15:09
Lon: There's a lot of proactive education that can be done to get people to understand there is a better option for care, because who wouldn't rather have something like that treated in their home than in the hospital?
15:19
Lon: Right.
15:19
Lon: So I think that there are a lot of things that can be done there, but you're right, people, people tend to default and it's gonna take a lot of time for an education campaign, but then you look at something like urgent care, right?
15:30
Lon: Urgent care, I think started off with its heart in the right place and then all of a sudden became a little bit of a way to disintermediate, in a sense, PCPs.
15:37
Lon: And that's not what we want to do.
15:39
Lon: People go there for things that they should go to their PCPs for.
15:42
Lon: So I think really slotting that at the right copay level and the right education is critically important.
15:47
Lon: And I'll tell you one thing we do.
15:48
Lon: When we get a call from a patient or from a provider or anyone, we're gonna understand what that primary complaint is.
15:54
Lon: If it's too high acuity, we're gonna get them right to the er, but if it's too low acuity, we're gonna try and get them back to their PCP or urgent care provider in network because that's where the value lies My goal.
16:05
Lon: To be a really good partner and a good steward of the MLR of my partners, and I can't be seeing a bunch of sore throats and things like that in the home.
16:12
Lon: That just doesn't work, right.
16:14
Lon: So I think there's a lot of education that can be done on the front end, and then when they call us, we need to be able to educate them as well.
16:21
David: So a pet peeve I've had is when you call pretty much any.
16:24
David: Healthcare provider and some payers, um, you know, they'll say, wait, you know, we're not around or whatever, but you know, if this is a medical emergency, hang up and dial 9 1 1.
16:34
David: So it's not as though they say, well, you know, see if it's really serious, do this.
16:38
David: But, you know, so they just basically, I'm not here.
16:41
David: I don't wanna be responsible, call 9 1 1.
16:44
David: So there's, there's a lot of that and I wonder where, you know, if you look and you say, uh, let's get into this triage aspect a little bit more.
16:50
David: Because sometimes, and, and it's like, in this example I gave of the elderly couple before seemed okay, seemed manageable, and all of a sudden it went from the person that starts to panic maybe.
17:00
David: 'cause the, the, the fever, you know, went up.
17:03
David: Are they still gonna go and just do 9 1 1, or is there actually a way to intervene and get it at the right level?
17:11
David: Or do you still have to be very conservative?
17:13
Lon: Yeah.
17:14
Lon: Well, I think that if you have an option, like a Care2U upfront, that allows people to make that decision a little bit sooner.
17:21
Lon: Because the problem is, and I'm sure you've done this, I've done this.
17:24
Lon: I put things off and put things off hoping they're gonna get better and they get worse.
17:27
Lon: And then all of a sudden I have to run to this worst case scenario situation.
17:31
Lon: And if you call 9 1 1, there's a good chance there's, uh, a transport involved in that.
17:36
Lon: I mean, that blows up the cost model right then and there.
17:38
Lon: I don't even factor that into any of my conversations in any way, shape, or form.
17:41
Lon: So I think giving them options that make sense, that they can actually react to sooner.
17:46
Lon: Makes sense.
17:47
Lon: I, I can see, and I'm, I'm not saying we're doing this right now.
17:50
Lon: Uh, we do partner with.
17:51
Lon: You know, typically we will get embedded when we work with a, a payer into their.
17:56
Lon: Telehealth provider is an escalation point.
17:58
Lon: They're a nurse, triage line, things like that.
18:00
Lon: But I could see a world in the future at some point where we consider becoming a nurse triage type of vendor because we're actually someone that can be in the right place at the right time and do the telehealth or do the in-person care or do those kind of things to be able to do it.
18:15
Lon: Not saying we're going there and like.
18:16
Lon: If you look at most early stage companies, a lot of the reason they fail is they want to be too many things to too many people.
18:21
Lon: And I don't wanna do that, but it's something that I do think about in the back of my mind, and if I had the right payer approach me at the right time about that, I think it would be something I'd be willing to have a conversation about.
18:31
Lon: But it would have to be the right time.
18:32
Lon: But.
18:33
David: You know, uh, speaking about early stage companies and, and successes and, and failures.
18:37
David: I know you're a fan of a podcast and you, you, you used to be a co-host before you decided to apply yourself, uh, more specifically.
18:44
David: And I, I love the name of your, your podcast, the Healthcare Grind.
18:47
David: I mean, that that could, every podcast could be called that, but the focus was on the early stage founders and you know, what it really takes to build something in, in healthcare.
18:56
David: And I was gonna ask you about kind of the most common mistake that you see, and I think you just mentioned trying to be.
19:01
David: Be everything to everybody, but any, any other kind of things that you heard from founders that are guiding your current experience?
19:07
Lon: Yeah, so I, I do think the all things to all people is a really hard, because there are so many things on a day-to-day basis that come to me that could be really good moves for us financially, but take us off task.
19:17
Lon: So I think one is being really focused is very important, but I think the other thing is.
19:21
Lon: Too many early stage founders want to boil the ocean.
19:24
Lon: They wanna get out there and they say, look, my model's doing really well here.
19:28
Lon: I wanna be in 50 markets, and I just don't think that works.
19:31
Lon: We have been really deliberate about doing a really good job in probably one of the toughest healthcare markets in the country.
19:39
Lon: Lower, lower New York is, it's impossible.
19:42
Lon: I mean, it could take you an an hour to go a block.
19:45
Lon: It costs you 50, 60 bucks every time you wanna park.
19:47
Lon: It costs you $45 in tolls.
19:49
Lon: Like you've got all these kind of things.
19:51
Lon: You're getting, you know, tickets like crazy.
19:53
Lon: It's, it's really difficult.
19:54
Lon: You've got regulatory challenges that you just do not have in other states.
19:57
Lon: So I wanted to be really mindful in building something that is very scalable and we've got our clinical model right.
20:04
Lon: We've got everything lined up in the right way.
20:07
Lon: Now we're at the point and, and we're, we're well backed by a great firm and I feel wonderful about that.
20:12
Lon: But we're probably about a week or two away and maybe this, this episode will come out later from probably kicking off some additional fundraising because now I think is the right time.
20:21
Lon: We've built the right model to raise some additional funds and move into some other markets.
20:26
Lon: And I think one thing that's interesting about.
20:29
Lon: This, um, emergency like er at home and hospital at home kind of spaces.
20:34
Lon: There really isn't a national player.
20:35
Lon: They're very regionally focused, a really small market focused.
20:39
Lon: And that's challenging because payers live in this world where they want to do everything from like a national level.
20:44
Lon: And it's not the right way to look at this right now because if you're gonna wait for that, you're gonna be waiting like a while, right?
20:50
Lon: So, so I think now is the right time to do that and it's, it's been staying really focused on building a good product, a great product.
20:56
Lon: Now we can go and move into other spaces.
20:59
David: Alright, so, so I'll throw some old, old stuff out there.
21:02
David: So, you know, if you look at New York, which I'll agree is a tough market and, uh, just tough in a lot of standpoints, is it this sort of, you know, if you can make it there, you can make it anywhere or you have the issue of like, you know, will it play in Peoria?
21:15
David: In other words, you know, what you're doing there.
21:17
David: Overcoming some of those big barriers.
21:19
David: Do you end up doing things in a way that actually don't make sense in a place where.
21:22
David: There isn't traffic, you can just pull up and park and, you know, not everybody's, uh, as aggressive or what, however you wanna describe you.
21:30
David: They're not all Yankees fans.
21:31
David: For one thing,
21:33
Lon: I'm not gonna comment.
21:34
Lon: I grew up in Philadelphia, so I'm probably no one's friend, so I'm just gonna leave, leave that one there.
21:39
Lon: No, I, I think I, I think you're right.
21:41
Lon: If you can make it here, you can make it anywhere.
21:43
Lon: I believe that.
21:44
Lon: I do think that healthcare is very local, so you want to be able to stand up teams that are local in that area.
21:51
Lon: I don't think that it doesn't play well in a Peoria or anywhere else, but I do think you need to have density of patients for it to make sense.
21:58
Lon: You know, you can have a three hour drive time between patients.
22:02
Lon: Or else the cost would be really high.
22:04
Lon: Um, and, you know, we have to be mindful now.
22:07
Lon: Um, you know, payers have to decide what their needs are.
22:10
Lon: If there was a need and it was more rural and there was a way to financially make it work, then we could do it.
22:15
Lon: But we need to be very efficient in what we do.
22:17
Lon: Keep in mind that when you're providing high acuity care in the home in two to four hours.
22:22
Lon: In a way you have to be somewhat inefficient 'cause you always have to have an extra capacity on the side.
22:27
Lon: So it's being as efficient as you can with a little inefficiency baked in, in case it flexes.
22:33
Lon: Right.
22:33
Lon: So I, I think the lesson in New York plays really well.
22:37
Lon: Um, and, and I think, I think we could do this in just about any market, but I think density is important for us.
22:44
David: So you mentioned payers during, let's, let's talk about that a little bit.
22:46
David: Sure.
22:47
David: 'cause payers certainly.
22:48
David: Get a bad name and I'm, I'm not saying they don't deserve it in a lot of cases, but you know, they've got this really financial, uh, incentive to keep patients out of the hospital.
22:59
David: And so on the one hand, you'd say makes total sense, you can show a good ROI, um, they'll lean into it On the other hand.
23:06
David: There's a concern that they have about kind of, you know, denying care or putting people in the wrong, you know, kind of places.
23:12
David: So that, that started probably, you know, with, with HMOs and saying, you know, you have to get out right after your give birth and, and stuff like that.
23:19
David: And so how do they handle it?
23:21
David: Because an argument could be say, well, you know, I used to go to famous hospital number one or two, uh, in Boston when I had a problem and now they want me to go to this, you know, this other thing.
23:33
David: And, and actually stay home and not go.
23:36
David: So how, what is the dynamic like with payers and is it changing?
23:41
Lon: So payers are really leaning into this market.
23:44
Lon: Um, and that's kind of my background.
23:46
Lon: That's what I've been doing for the last 20 plus years, the payer world.
23:49
Lon: And I think that's what makes us different is I'm actually able to go and, and speak payer.
23:53
Lon: Right?
23:54
Lon: And, and I, I know what makes them tick and payers are really leaning into this.
23:59
Lon: I don't think it's one of those where you're ever, I, I don't think patients are gonna look at this and say, my goodness, my payer now wants me to be hospitalized at home versus this hospital.
24:08
Lon: I think people want to have care at home.
24:11
Lon: They wanna be with their loved ones, they wanna be with their pets.
24:13
Lon: Um, they wanna be able to walk around and do those things when they, they can do that.
24:17
Lon: So I think that this is something that is like, it's really additive.
24:21
Lon: It's, it's a customer service boost.
24:23
Lon: Like I'll tell you, our NPS is an north of an 85.
24:26
Lon: If you're in healthcare and you're over a 30, you're doing something right.
24:29
Lon: Like people really love this.
24:31
Lon: So I don't look at it as something that's, um, that's risky for a payer to do in any way that people are gonna take the wrong way.
24:36
Lon: It's another option that a patient can take.
24:39
Lon: And what's really interesting is doctors love it.
24:41
Lon: We're getting tons of referrals from doctors.
24:43
Lon: Tons from home health and assisted living facility, or communities, I should say, and others.
24:48
Lon: Um, because, because it really works well.
24:50
Lon: So I don't, I don't think there's any risk of that at all.
24:53
Lon: If anything, it's funny, I look at it, um, I think there's gonna be a very smart payer on the commercial side that's gonna at some point in the future, do what I was, uh, over Teladoc many years ago, and Teladoc did a partnership with Oscar, and Oscar went out and did this.
25:09
Lon: Talk to a doctor, 24 7, whatever, and they, they did great.
25:13
Lon: When it came time to annual enrollment.
25:15
Lon: Somebody's gonna be really smart here and say, wait a minute, commercial, we're kind of missing the boat here.
25:21
Lon: I can go to these commer, you know, to these insurers, I'm sorry, these, these employers, and say, I can replace a 35, $40,000 hospitalization with something that's like a six of the cost.
25:31
Lon: That's gonna play really, really well.
25:32
Lon: Somebody's gonna lean into this model and really, really do well.
25:36
Lon: I'm waiting for the first payer to really, I mean, they're, I have a lot of payer partners and they're getting really excited about this, but somebody's gonna really step up to the plate and really, really push this one like Oscar did.
25:45
Lon: And it's gonna be a huge win.
25:46
Lon: 'cause because employers are hungry for this.
25:48
Lon: It doesn't take a lot, and you know, it doesn't take a lot of cases to move that way.
25:53
Lon: And you have control as an employer to send things out to your, you know, to your employees and let them know that this option exists.
25:59
Lon: I, I think that's gonna play really well.
26:02
David: Let's talk a, a, a little bit about different, uh, categories of patients and whether that's segmented based on their, their payer or their age or something like that.
26:11
David: But I, I was thinking about sort of the commercial population, which you're just describing, and then I was also thinking about, uh, you know, geriatric, which we talked about a little bit, and then the kind of the overlay with, uh, Medicaid or people that are more.
26:24
David: Um, you know, have less resources, uh, let's say for example, those people that whose homes are not the best setting for, uh, for care.
26:33
David: How do you think of these different populations?
26:35
David: You, you already started to mention, uh, commercial, but maybe, maybe lay out your, how you think about the segmentation and your focus.
26:40
Lon: Yeah, so I would say if you just look from, you know, the a DK or admissions per thousand standpoint, Medicare is always gonna be the winner, right?
26:48
Lon: Because older patients are gonna have more needs.
26:50
Lon: So I think on a, on an individual member basis, there's always gonna be more utilization of Medicare age members.
26:57
Lon: But we are seeing a lot of uptick in commercial and also in Medicaid as well, because there's a ton of value to this.
27:04
Lon: And access to care, if you look at Medicaid, is such an issue.
27:07
Lon: Um, and this really helps to expand the access.
27:10
Lon: So I think, I think all of the above really can do incredibly well.
27:13
Lon: I think we, we started in our hypothesis was gonna be that Medicare was gonna take off like a rocket, and it really did.
27:19
Lon: But now we're starting to see all these other groups really start to catch up.
27:22
Lon: Um, and it's really interesting.
27:23
Lon: And now you're getting more of.
27:25
Lon: Value-based care.
27:26
Lon: You're getting more groups taking on VBC attribution for, um, commercial populations in addition to MA and others ACOs, things like that.
27:34
Lon: It's, it's really starting to take off.
27:35
Lon: It's, it's become a really valuable lever for folks.
27:38
Lon: And one thing I never, me, I haven't mentioned yet, which I think is really interesting, um, is that patients love this for the reasons I talked about, but.
27:47
Lon: With, with the contracts that I have, patients are paying a specialist copay for this, right?
27:52
Lon: We're billing it as a house call.
27:54
Lon: We may get an advanced rate on that house call, so it's not being billed as an ER visit or a hospitalization.
27:59
Lon: So they're typically paying, you know, what is a specialist copay, 25 to 30, 35, $40, something like that.
28:05
Lon: It's a pretty big win for the financially as well.
28:08
David: You mentioned value-based care.
28:09
David: Let's talk about that.
28:10
David: 'cause that's been something we, we pointed at for a long time, saying, you know, it makes more sense.
28:15
David: You don't just pay.
28:16
David: You know, for volume, you pay for, for performance and, uh, and for outcomes.
28:20
David: We've been talking about that for a long time, and during that time, I'm not sure there's been a, you know, any kind of a flattening of the cost curve or improvement of, of quality or, or satisfaction.
28:32
David: So give your thought on value-based care and then how it fits in with what you're doing.
28:39
Lon: Okay.
28:40
Lon: Okay.
28:41
Lon: So, you know, I look at value-based care in a couple of different ways.
28:43
Lon: So you've got the VBC where you have provider groups taking on risk, right?
28:48
Lon: And that, you know, maybe you have like an Aetna or United or, um, an Anthem or someone that's, that's, that's pushing risk out to a, a provider group.
28:57
Lon: I love it, but I think it's challenging for them, right?
29:00
Lon: Because as a provider you now have your, your one foot in two different boats, right?
29:05
Lon: And you know, I'm just making this up, but 90% of your lives may be fee for service.
29:09
Lon: 10% are value-based.
29:10
Lon: Care providers can't sit there and think about, oh my goodness, this one's this and this one's this.
29:15
Lon: They can't think like that.
29:16
Lon: So it's really hard to be able to be successful in that model.
29:20
Lon: We need to see the model speed up.
29:22
Lon: More rapidly, I think, for that to actually take hold because it's, it's just, it's, it's almost unfair in a sense for providers to be able to figure that out.
29:30
Lon: I do love where it's going.
29:31
Lon: Where I do think it's starting to take hold and do really well is these, um, the models like your oncology models or your chronic conditions, or your home-based care models.
29:41
Lon: I think they're interesting.
29:42
Lon: Um, and I think, so I think specific populations like that.
29:46
Lon: I like where that's going, but then you're sub capping out to a bunch of people.
29:49
Lon: I mean, the easiest thing in the world you could do is give it to a provider group, set it, and forget it.
29:54
Lon: Right.
29:55
Lon: Um, so I think there's, there's a lot of value there.
29:57
Lon: One thing I'll say is.
29:59
Lon: We do partner with a, a bunch of payers, but we also do partner with a lot of these, um, risk-bearing groups or these, these groups that are taking even pockets of risk because, you know, I'll give you an example.
30:10
Lon: Like if you look at, and without talking about specific companies, but if you look at one that's maybe in an oncology space or something like that, I am sure they have patients that are going.
30:20
Lon: You know, all day long for dehydration to the hospital.
30:23
Lon: Things like that.
30:24
Lon: Like why are we doing that?
30:25
Lon: Right?
30:25
Lon: We could, we could layer on, you can escalate to us.
30:28
Lon: We can go in there and do that.
30:29
Lon: What about some of these infusions, right?
30:31
Lon: Infusions in the hospital.
30:33
Lon: Cost is up here.
30:34
Lon: Infusions in a freestanding facility here.
30:36
Lon: What about infusions in the home?
30:37
Lon: We can help you with that, right?
30:39
Lon: We can help you maximize that site of care.
30:40
Lon: So, so I think there's a lot to be done on the value-based care side and you know, I, I think, I think its heart is in the right place.
30:47
Lon: I just think it's taking really long to get there and I think it's because it's hard to be, have two masters, right?
30:52
Lon: Fee for service and, and value-based care.
30:55
Lon: And, and everybody wants to stick with be for service.
30:57
Lon: 'cause it's predictable.
30:58
Lon: Not everybody, I mean, providers wanna stick with, with that.
31:03
David: So Lon, the only place I'll take issue with that and for those watching on video is what, what you did in terms of the hand motion.
31:08
David: In terms of the cost.
31:09
David: And you, you did like a hospital infusion here and it's actually up, I think, above the screen.
31:13
David: Nice about it.
31:14
Lon: I was pretty, I, I was being nice.
31:17
Lon: Um, you know, and, and, and to be clear.
31:20
Lon: We have a lot of hospital partners and I absolutely love working with them.
31:23
Lon: But you know, they have certain models and I think they're perfect for certain things.
31:28
Lon: And I think there are other options for other things, right?
31:32
Lon: And it's just like healthcare costs are outta control.
31:34
Lon: I don't have to convince anybody of that.
31:36
Lon: We need to find ways to reign things in, in some way, shape or form.
31:39
Lon: And I think site of care optimization is just makes a ton of sense.
31:43
Lon: Right.
31:43
David: Let's talk about Optum for a minute.
31:45
David: 'cause you're obviously, well, you know, familiar there and they, they understand the problem and the solution and even better, now that you're left out there and uh, and showing 'em how it's done, um, do you think Optum's gonna come in and just take your idea and, and just go faster even if you do have a good financial partner?
32:04
Lon: Um, uh, I think Optum would be more of somebody that would want to come in and, and, and buy the business.
32:09
Lon: I don't think Optum is a company that's gonna go and stand this up on their own.
32:12
Lon: To be very clear.
32:14
Lon: And, and to be fair, I think, you know, they're owned by a payer United.
32:18
Lon: I think the payers are in a really tough position right now.
32:21
Lon: All of them or, or, I don't wanna say all.
32:24
Lon: The best majority of them, almost all.
32:26
Lon: And you know, the challenge is they got killed on a risk adjustment with V 28 M MLR is going up, it's going the wrong way, right?
32:33
Lon: Um, the annual increases aren't what they used to be.
32:36
Lon: All of that, all of'em are under pressure.
32:38
Lon: So they're having to make all these cuts and all these changes.
32:42
Lon: They can't do things right now.
32:44
Lon: None of them that are not highly profitable with predictable margins day one.
32:50
Lon: There's no way they can jump in and do this right now.
32:52
Lon: Right?
32:53
Lon: That's where innovative companies like ours come out here.
32:55
Lon: We make a space happen.
32:57
Lon: We do something that's really interesting.
32:58
Lon: Then a company like them or another one wants to come in and say, Hey, we'd love to acquire or partner you because not only is there value in your company, but we're gonna plug you into all of our lives and we're gonna make this company exponentially more valuable.
33:11
Lon: And they did that with my old employer, NavaHealth, right?
33:13
Lon: They acquired naviHealth, plugged us in, um, got the value of naviHealth.
33:17
Lon: Rolled us out to all their lives, got additional value there, made a lot of sense.
33:20
Lon: But, but I think there's gonna be a, you know, a couple of years of, of, of kind of right sizing and getting everything right at Optum.
33:27
Lon: So, I'll say one thing.
33:28
Lon: I I very openly, anyone that knows me, knows that I'm probably, they wouldn't think of me as somebody that would go and work for Optum.
33:34
Lon: I was a acquired and work for Optum.
33:36
Lon: But I have to tell you massive respect for the folks there.
33:39
Lon: Really sharp people there.
33:41
Lon: I I, I was really impressed with what I saw there.
33:44
Lon: Um, so hats, hats off to them, but I, I know it's a tough time right now.
33:49
David: So, la last question is gonna be about kinda what's happening in this, in this space broadly, because a lot of people realize that the home.
33:57
David: Is where you wanna be.
33:58
David: So whether it's hospital at home, home health, some, you know, some various permutations about that.
34:04
David: Uh, we talked about your initial differentiation, you know, which you're doing quite different from, from others.
34:10
David: How do you sustain that over time, uh, to win?
34:14
David: Do you see that?
34:15
David: What's gonna happen is that a lot of people are gonna.
34:17
David: Copy the model or you're gonna actually have to adopt, adapt, uh, other pieces that people are doing or can, can you keep that differentiation as you grow and potentially go national?
34:27
David: Um.
34:28
Lon: So I, I think we have a head start.
34:30
Lon: I see a lot of companies that are, like I said, doing urgent care at home or doing waiver program, hospital at home.
34:36
Lon: And very openly we're doing non waiver, but we could do waiver as well.
34:40
Lon: I've, I've got conversations if I want to do that, I can do that.
34:43
Lon: So I think we can maintain this differentiation, but at the end of the day.
34:48
Lon: I want to change healthcare if that is my company driving this.
34:52
Lon: Excellent.
34:53
Lon: If there are other folks in other areas of the country that wanna stand up and try and make this happen, do it.
34:58
Lon: It's a model that makes sense.
35:00
Lon: It's, it's good for patients, it's good for healthcare overall.
35:04
Lon: I'm a fan of it.
35:05
Lon: Right?
35:05
Lon: So we, we are going to plan to move into other markets and you know, we can do that on our own.
35:12
Lon: We could partner with other organizations that are on the, on the ground in other markets or other folks can kind of try and emulate that of what we're doing.
35:19
Lon: I do think we have a lead.
35:20
Lon: I think we're doing things right.
35:21
Lon: Um, but, but, but I welcome it, right?
35:24
Lon: I mean, it's, it's, let's try and take this to the next level.
35:26
Lon: That's really what I want.
35:29
David: Well, that's it for yet another episode of Care Talk Executive features.
35:33
David: I'm David Williams, president of Health Business Group.
35:35
David: My guest today has been Lon Hecht, CEO of Care2U.
35:39
David: If you like what you heard, please subscribe on your favorite podcast platform and thank you, Lon.
35:45
Lon: Thank you, David.
35:46
Lon: It's a pleasure.