The Network for In-Home Care: Why We Invested in PreparedHealth
Just as our President is discovering the intricacies of the US healthcare system, the average citizen, particularly our seniors, is watching our system’s complexity begin to weigh on the creaking (and shifting) foundation on which it stands.
We are aging quickly—10,000 people turn 65 every day—and it’s getting expensive. Our 44th President saw skyrocketing healthcare costs as the greatest threat to our democracy’s fiscal health and, despite active discussions in Congress to amend our existing regulatory regime, there are no silver bullets. Systemic challenges like patient disinterest in preventative care, stale health records (digital or otherwise) and caregiver shortages have made disease tougher to prevent and care harder to coordinate and deliver.
One area in which both runaway costs and a severe lack of coordination are clearly evident is post-acute care (PAC), which represents rehabilitation or palliative services (e.g. inpatient rehabilitation services, skilled nursing facilities, home health agencies, etc.) that patients receive after or instead of acute care. Medicare spending on PAC doubled to $60B+ over the past decade, making it the fastest growing healthcare market, and no one expects this growth to slow as the vast majority of patients now want to receive care in the comfort of their own homes. In response, both the Centers for Medicare & Medicaid Services and payers are on the offensive to reduce the cost of PAC by cutting reimbursement rates, auditing claims and employing value-based payment models. Already margin-constrained PAC providers are feeling the squeeze.
In what is both a highly fragmented and digitally under-resourced PAC market, it’s not uncommon to find a dozen caregivers—from family members to providers of short-term nursing, hospice, physical therapy, counseling and lab imaging— servicing one patient at home over the course of a few weeks. Despite working in the same household, these caregivers operate largely unconnected as they are without tools to interact with and/or update one another on the status of a particular patient in real-time. Though some of these services may fall under a large home health agency’s (HHAs) umbrella, no HHA provides a full stack solution. This means patient paper trails are either incomplete or non-existent—an unsurprising reality of a market in which only 50% of providers utilize EHRs and the best-in-class tools for caregivers are clunky, web-based forms. Coordination and routing of patients are conducted without context and thus decisions and interventions are sub-optimal. Providers of secure texting, tech-enabled home health services and care transition software have attempted to tackle these challenges but, ultimately, the vast majority of data emanating from the home has stayed within the home, enabling the status quo to persist. Given spiraling costs, we need a different approach.
Enter PreparedHealth—an engagement layer that stitches together the distributed, disjointed network of stakeholders involved in a patient’s care in and around their home. With PreparedHealth’s enTouch™, a consumer-grade experience that replicates the ease of use we’ve come to expect from social communication apps, caregivers and families update each other on a patient’s status in real-time so that the proper action can be taken. Underneath this interface lives DINA™, an intelligent digital nursing assistant, which informs the interactions taking place on enTouch™ by continuously analyzing data to enable evidence-based care transitions and interventions. As more stakeholders use the application, DINA™ becomes smarter. And, as DINA™ becomes smarter, patient outcomes improve, drawing more providers who see the value of participating in a dense network that prioritizes the right care for the right patient at the right time.
PreparedHealth is seeding this virtuous loop by working with the country’s largest HHAs to implement a model for Total Relationship Management, enabling intra-organization collaboration, external care transitions and self-directed care for empowered consumers. Moreover, they are helping organizations identify the care gaps that exist within their own network—the areas out of which patients will simply drop from their ecosystem of engagement and eventually increase their risk for re-hospitalizations. With PreparedHealth, HHAs can work both together and with community providers to eliminate these gaps within a particular geography, synchronizing home health services so that patients are always placed in the appropriate care settings and delivered the highest quality experience.
When Chicago Ventures was founded five years ago, we were outsiders to healthcare and preferred it that way. We saw extended sales cycles, regulatory interference and misaligned incentives up and down the healthcare value chain and were happy to focus our attention elsewhere. But, when you sit in the middle of a healthcare ecosystem as dynamic as Chicago, it was hard to keep looking the other way. So, as outsiders tend to do, we initially invested in other outsiders—those that were re-imagining consumer health services from the ground up. We then turned our attention to “picks and shovels”, a new class of security, infrastructure and data management tools necessary to enable healthcare delivery models to transition effectively. More recently, we’ve partnered with those building “care enablement” applications on top of these underlying tools that use data to make caregivers more effective at the point of care. Five years later, healthcare represents our largest industry exposure across the active portfolio. But, though our thesis in healthcare has evolved, a common thread among our companies has persisted. That is, in an industry where the ultimate goal of any software provider is not simply to increase revenue, decrease costs or improve productivity, but rather to improve the livelihoods of patients, the types of people capable of meeting this end need to be cut from different cloth.
PreparedHealth’s founding team previously built and scaled Medicity—the largest health information network in the country—culminating in the company’s acquisition by Aetna for $500M. The lessons learned from building a multi-tenant network like Medicity that was constructed to serve a diverse set of stakeholders across the healthcare continuum are directly applicable to PreparedHealth. But, more importantly, the team has built a product for themselves, grounded in the shared challenges of keeping their aging parents healthy at home and out of the hospital. Like most great narratives, PreparedHealth’s is deeply authentic. We, alongside our friends at Beverly Capital, Meridian Street Capital and Pritzker Group Venture Capital are proud to stand shoulder-to-shoulder with the team as they see it through.