September 29, 2020

Talking with Contessa Health, a Hospital at Home Trailblazer

by Christy Davis

THE GIST

Recently, Gist Healthcare Daily host Alex Olgin spoke to Travis Messina, CEO of Contessa Health, about the recent surge of interest in the hospital at home model due to COVID-19. They discussed the nuts and bolts of how health systems partner with Contessa, the benefits provided to patients, and how systems can gain physician support for the model. Check out parts one and two of that audio interview to hear more, and check out the below for a summary of our conversation.

For more on hospital at home, and why we believe health systems should revisit the care model in the COVID-19 era and beyond, check out our previous blog post “Is it Time for Hospital at Home?”

Travis Messina is the founder and CEO of Contessa Health, a company that partners with provider organizations and payers to create and operate home hospitalization programs. He is passionate about treating patients in a setting that best fits their needs, which is often the home. He founded Contessa in 2015 to provide a new standard of healthcare for providers, payers and patients. Since its launch, the company has partnered with six health systems across the US and continues to grow. Before Contessa, Travis built his career investing in healthcare ventures. He spent time at Martin Ventures, Vanguard Health Systems, Signal Hill Capital and SunTrust Robinson Humphrey.


Our dialogue with Travis Messina, Founder and CEO, Contessa Health

Hospital at home in the COVID era

Gist Healthcare: Travis, how much inbound interest has Contessa had since the start of the coronavirus pandemic? It seems like we’ve been hearing about the popularity of hospital at home skyrocket since March.

Travis Messina: There’s been a considerable amount of interest in the model. It’s really falling into three categories:

  1. Expansion from our existing partners;
  2. Health systems that were primarily focused on trying to solve a COVID surge issue, but didn’t really have a long-term view as it relates to pursuing hospital at home;
  3. And finally, those systems that sort of had a moment of clarity in the midst of a crisis that they need to incorporate this model as part of their long-term strategy.

Across these three buckets we’ve had genuine interest from nearly two dozen health systems since March.

GH: Have your health system partners been using the hospital at home model to treat COVID patients? 

TM: When the pandemic first started, our initial position was actually to not treat COVID-19 patients in the model—neither we nor our provider partners were comfortable doing so as there wasn’t a lot of knowledge about the virus at first. But we quickly identified how to safely treat these patients in our program and we’re currently, in a number of markets, actively treating COVID patients at home. It’s been a great benefit to both our partners and to the patients themselves.


Building a financially viable model

GH: Why do you believe hospitals looking to implement a hospital at home program decide to partner with Contessa?

TM: If I’m completely honest, I would say the number one question we get from potential health system partners is ‘Why should we partner with Contessa as opposed to building it ourselves?’

First and foremost, you have to look at the financial requirements for building a hospital at home program. This is all Contessa does every single day: we’ve raised nearly $60 million in capital, we’ve got a team of about a hundred folks who only focus on hospital at home, and we have the ability to leverage best practices operationally, clinically, financially, and administratively across the country and bring those to individual health systems. So, I think that scale and focus is really beneficial to our health systems.

The number one question we get from potential health system partners is ‘Why should we partner with Contessa as opposed to building it ourselves?’

Secondly is the cultural mindset. Hospitals’ entire DNA has been focused on identifying patients who need hospital-level care and then admitting them to the floor. Now you’re asking admitting physicians to do the complete opposite by sending patients who need acute care back home. It takes quite a while for hospitals to figure out the best way to do that, both clinically and administratively. Having a fresh cultural approach to care delivery is really important.

Lastly, I would say the joint venture (JV) structure Contessa utilizes for our programs with hospital partners is a great financial benefit to them. For example, Mount Sinai spent several million dollars operating their own hospital at home program for three years but then decided to establish a JV with Contessa. Their investment with us is just a fraction of their initial investment, and from a return-on-invested-capital perspective, partnering with us is a much more attractive financial proposition for them. A health system can spend tens of millions of dollars to create and control a hospital at home program, or it can spend hundreds of thousands of dollars but still retain a decent majority of the revenue generated.

GH: How are you overcoming the lack of fee-for-service reimbursement for the model?

TM: Contessa has focused extensively on how we can create a sustainable reimbursement and economic model for our partnerships. We create equity joint ventures with our health system partners, which are typically 50/50 deals. We fund those joint ventures with capital, putting in money alongside our partners. Then we help our partners secure 30-day risk-based arrangements with managed care organizations. We focus pretty exclusively on Medicare Advantage plans but do have contracts with commercial payers and even some managed Medicaid contracts. The joint-ventured entity receives reimbursement. We then pay the health system providers rendering care to patients in the hospital at home program and, after covering our administrative costs, split whatever earnings are left over according to the joint venture ownership arrangement.

GH: What kind of timeline or volume is needed for one of these JVs to either break even or deliver a positive return?

TM: Contessa has demonstrated the ability to return a considerable amount of the capital invested within a two-year timeframe. On a break-even basis, I would say it takes us between 12 and 15 home admissions a month. We look at volumes as a percentage of admits to the hospital at home program for the health plans we are contracted with; typically, about 10 percent of our health plan inpatient admissions come into the program.

Contessa has demonstrated the ability to return a considerable amount of the capital invested within a two-year timeframe.

A return on invested capital really depends on the payer dynamics in a health system partner’s local market. If the health system doesn’t have an integrated payer, it’s beneficial to have some fragmentation and several payer options. However, you don’t want too many payers, as then you’d have to strike contracts with a lot of them to be able to service a significant enough patient population of each.


Improving the way patients receive care

GH: What kind of patients are typically ideal for a hospital at home program? Do you flag certain conditions?

TM: We’ve taken a very different approach than I would say the ‘legacy’ hospital at home programs have utilized. When we first started out, we tried to target very specific conditions, but one of our team members pointed out one day that hospitals don’t try to classify each patient with their condition from the moment they show up at the ED. Instead the decision is made that a patient needs in-patient level care, and then their exact condition is confirmed later on.

So, we flipped the process and now we ask, ‘does this patient need inpatient-level care?’ If yes, we ask ‘can we safely treat them in a home setting?’ And if the answer to that question is still yes then we figure out what their exact condition is later on. It really becomes more about what can you safely do at home, as opposed to what condition a patient has. When you use that mindset, and that approach, you can really target a greater number of patients than if you just target specific conditions. When Contessa launches its partnerships, we never limit the conditions—we are contracted for all the conditions we are capable of treating.

We flipped the process and now we ask, ‘Does this patient need inpatient-level care?’ If yes, we ask, ‘Can we safely treat them in a home setting?’

GH: Do patients have to physically come into the hospital to participate in the program or can they be admitted directly from home?

TM: Patients definitely don’t need to come into the hospital to be enrolled in a hospital at home program. We admit from physician and urgent care clinics and pretty soon, we’ll be able to admit after a virtual visit. That being said, the significant majority of the patients we do enroll are identified in the emergency room.

GH: I’d assume patients feel like they’re getting better care and more attention if they’re physically in the same building as their physicians, nurses, and other providers. Do patients want to be treated at home?  

TM: That’s probably one of the easiest components of our model, because we’re now creating optionality where it previously didn’t exist. Today if a patient comes into a hospital and needs hospital-level care, that patient is either admitted or leaves against medical advice. With home hospitalization we can now give them a third option.

The overwhelming majority of patients we treat are in Medicare Advantage plans and they’ve been hospitalized before. Having worked in a hospital, hospitals do amazing things and we have amazing partners, but in many instances being hospitalized is not the best experience for a patient. We have found that if patients are eligible for our hospitalization at home program, 93 percent of the time they accept.

GH: What do readmissions look like for your hospital at home patients?

TM: Readmission reduction has been a primary focus of Contessa and the way in which we support our health system partners’ management of hospital at home patients. Some of our partners have generated a 44 percent reduction in readmission rates on a matched cohort basis. We achieve that through a rigorous hands-on care management program. We have care management teams both locally and virtually supporting our provider partners to make sure patients enrolled in our program stay on a path to recovery that avoids readmission.


Assembling the hospital at home workforce

GH: How do you get physicians on board with admitting patients to a hospital at home program? That’s got to be a huge shift.

TM: Physician adoption is really hard. You’re asking them to do something that flies in the face of everything they were taught in medical school. We’ve told physicians at new site launches ‘this patient is great for hospital at home, and they’re eligible to be admitted’ and the physician would say ‘wait, you’re telling me they need to go upstairs, but you want me to send them home?’ It certainly makes for an interesting conversation.

But a key part of Contessa’s value proposition is the training and physician engagement we do, not only prior to launch, but on an ongoing basis. Our Chief Medical Officer leads clinical quality councils and, along with our Senior Medical Directors, works with physicians at our partner organizations across the country. They bring physicians together to talk about best practices, celebrate success stories and identify areas of opportunity for expanding hospital at home programs.

Physician adoption is really hard. You’re asking them to do something that flies in the face of everything they were taught in medical school.

There is definitely an acclimation period for clinicians, because you’re asking them to do something they’ve never done before—so they tend to start with lower-acuity patients. And that’s okay, because you want them to get comfortable with the model and have them see you can have success with the model.

GH: How reliant is your hospital at home model on nurses, as opposed to other types of clinicians who could care for enrolled patients?

TM: Registered nurses (RNs) are the clinicians who round on patients on the hospital floor, and the hospital at home experience is akin to a patient being in a med-surg unit. We rely heavily on RNs for delivering care in order to keep the care model as close to the existing hospital model as possible. We find it also helps with physician adoption of the model.  

We adopt the industry practice of making sure people practice at the highest use of their license. We support RNs in some instances with social workers or community paramedicine if necessary, but really the three key team members are the hospitalist, the RN who goes into the home, and the recovery care coordinator.

GH: How does Contessa’s virtual team work with health system providers on the ground? 

TM: Having been a part of an integrated system, we know patients go to our partner health systems to see their clinicians. So, typically the hospital at home care team is a mix between our partners’ providers and Contessa providers, who primarily serve in care management roles.

The admitting hospitalists are usually employed by our partner organization. The RNs who go into patients’ home are either a part of our partner organization or nurses we employ. The recovery care coordinator is typically based locally and employed by the joint venture. And then we have a virtual care unit backing them all up telephonically and virtually, using our telehealth kit. Importantly, all care team members with whom a hospital at home patient interacts are viewed and branded as part of the partner health system.