Inside ‘Frontpoint Well being’: Well being programs vet builds new dwelling well being enterprise round Medicare Benefit
Brent Korte was Chief Home Care Officer at EvergreenHealth Home Care in Washington for more than eight years. During that time, it went from being an outpatient health agency that was a financial burden on a hospital system to a point where it was an integral part of it.
Now Korte embarks on a new adventure as the head of a brand new home health agency called Frontpoint Health. It just recently completed its first transaction, and Korte hopes the acquisition was the first step in a nationwide expansion.
There’s a reason Korte goes from one adventure to another, eventually relocating to another part of the country with his family and co-executives. Frontpoint Health will not be like any other home health agency, nor will it be like EvergreenHealth Home Care.
Medicare Advantage (MA) plans are often a nuisance to home care providers. Some have even refused to work with them. But Frontpoint Health does the opposite.
In fact, that’s the ethos behind Frontpoint: to be a home health care agency that caters specifically to MAs and doesn’t rely on the Medicare fee for services as its primary source of revenue.
“We want to have these discussions with Medicare Advantage, who will provide data and make sure we’re being paid appropriately,” Korte told Home Health Care News. “But we are ready to approach MA with the current cost structure.”
Frontpoint currently has three locations: One Point Health, a home care facility in Dallas with a enrollment of 2,200 patients; Dignity Hospice, also based in Dallas; and Highland Hospice, located in Houston. Korte described the latter two as “medium-sized hospices”.
Frontpoint is backed by Park City, Utah-based Tacoma Holdings and Salt Lake City, Utah-based Cimarron Healthcare Capital. The only investment listed on Tacoma’s website is JQ Medical Supply, a DME provider focused on home use. Meanwhile, Cimarron has current investments in behavioral health provider Ascent and Infusion Management, among others.
Frontpoint Health’s leadership team currently consists of three people, all veterans of EvergreenHealth: Korte, Molly McDonald and Alex Van Gundy. McDonald was previously program manager for quality and regulatory compliance at EvergreenHealth Home Care and will now serve as vice president of compliance and quality improvement at Frontpoint. Van Gundy will be the manager of Fata and Business Analytics.
Why Dallas to start
There are two reasons Dallas – a crowded home health care market – was chosen as the starting point for Frontpoint. There are some very large operators in Dallas, but also many smaller operators that struggle to “stand out”. Korte believes that Frontpoint can differentiate itself in two ways, first through quality and patient experience.
“Now that might seem like a ready-made answer, but there are more home health care facilities within a two-mile radius [One Point Health] than there is in all of Washington state,” Korte said. “Quality is diluted and staff is ephemeral. Our goal is to retain employees and double the quality and patient experience.”
And the second is the MA strategy mentioned above, one that few home health care facilities in the region are adopting.
“We want to pursue Medicare Advantage,” Korte said. “And that’s not saying we’re going to do an MA, but traditional Medicare, which has a strong focus on home health.” We will focus on bringing value to hospitals and healthcare systems by enrolling their MA patients and working with those MA plans to try to find their patients and eventually add value.”
Frontpoint will not only rely on acquisitions, but also de novos. For these new locations, the company is eyeing markets such as San Antonio, Houston, Austin and Waco, Texas.
“We’ll know exactly what the occupancy rate is in a given area before we go in, and we won’t go into areas that already have excellent coverage,” Korte said. “But that’s going to be the goal I’m obsessed with: We want to be the best employer for home nursing and hospice physicians and support staff in our country.”
The future of Frontpoint Health
Korte’s track record – and McDonald’s and Van Gundy’s, by the way – at EvergreenHealth has been impressive.
“What we really did was take Evergreen from a loss to one of the most productive departments or departments within the hospital,” Korte said. “Home care is responsible for a significant part of the bottom line of the system, something we are really proud of. If you’re not for-profit, that doesn’t mean you can’t achieve a positive financial outcome.”
In the future, Linda Brabant will take over the management of EvergreenHealth Home Care. Korte even has trouble not saying “we” when referring to EvergreenHealth.
But now he’s transitioning from a nonprofit agency to a PE-backed one, though he stressed he didn’t want Frontpoint to earn the label as “just another PE-backed provider.”
While it may seem like a paradoxical strategy for some home health care providers to embark on a for-profit path by collaborating with MA, Korte and its partners are confident in their ability to build a viable, nationwide business focused on MA.
“We want to be the go-to place for them and prove that we’re worth better rates and partnering directly with the plans and directly with the health care systems for capacity and quality,” Korte said. “There’s nothing groundbreaking about that, other than the fact that nobody’s actually doing it.”
The plan is to start in Texas, create some density, and then move to other regions of the country and do the same. However, Frontpoint will not rename the acquired organizations. The goal is to centralize the MA focus while keeping things hyper-localized at the provider level.
“We may not even go with a single EMR,” Korte said. “We don’t aim to increase efficiency just for the sake of bottom line. Our goal is to grow, win in the markets and create significant volume.”
Various MA strategies
Providers have been hard on the way MA plans pay for home healthcare services, especially in recent years.
Certain providers have even deprioritized MA patients due to staffing shortages and plans’ below-average rates. Still, the larger vendors have made it clear that they want to flesh things out with MA plans to build more viable relationships going forward.
At the same time, there are examples of vendors taking Frontpoint’s more “proactive” approach.
For example, private equity-backed Tennessee-based HomeFirst Home Healthcare has adjusted its operations to reflect the fact that there are so many more MA beneficiaries in the markets it serves than there used to be.
“It’s like any other business where your cost of goods sold is less than your payment rate,” Jim Happ, HomeFirst’s president and CEO, told HHCN in June. “In order to make a profit, we have to focus on payment. … So I just think that instead of moving away from that, we better move forward and be proactive.”
Korte follows the same logic, which makes him the right man to run Frontpoint.
Rather than resist, his company believes the best way forward is to adapt. Only time will tell if Frontpoint’s approach is the right one.
“If you look at the development of Medicare Advantage — and the fact that it’s a tidal wave — if you don’t get involved, you’re about to be sucked into that tidal wave,” Korte said. “Unless organizations are fully prepared to provide care at these MA rates and scale their organization to achieve this level of efficiency and value, they will be carried away and will not have a long future.”