Brent Korte was the chief home care officer at Washington-based EvergreenHealth Home Care for more than eight years. In that time, it has gone from a home health agency that was a financial drag on the hospital system to a major body.
Now, Korte is embarking on a new adventure as the leader of a new home health agency called Front Point Health. It recently launched its first transaction, and Korte hopes it’s the first step in expanding nationwide.
There is a reason why Corte moves from one adventure to another, eventually moving his family and fellow leaders to another part of the country. Front Point 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 pain for home health providers. Some refused to work with them. But Frontpoint Health is doing the opposite.
In fact, that’s the ethos behind Frontpoint: to be a home health agency that caters specifically to MA and doesn’t rely on Medicare reimbursement as its primary source of revenue.
“We want to take those conversations with Medicare Advantage, provide the information and make sure we’re adequately reimbursed,” Korte told Home Health Care News. But we are prepared to approach MA with the current cost structure.
To date, Frontpoint has three locations: One Point Health, a home health agency in Dallas with a patient population of 2,200; Honor Hospice, also based in Dallas; and Highland Hospice in Houston. Korte describes 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, which is a home-based DME provider. Meanwhile, Cimarron has current investments in behavioral health provider Ascent and Infusion Management, among a few others.
The leadership team at Frontpoint Health currently consists of three people, all veterans of EvergreenHealth: Korte, Molly McDonald and Alex Van Gundy. MacDonald was previously the program manager for quality and regulatory compliance at EvergreenHealth Home Care, and now serves as VP of compliance and quality improvement at Frontpoint. Van Gundy will be the manager of FATA and business analytics.
Why Dallas, to begin with
There are two reasons why Dallas – a crowded home health market – was chosen as the home base for Frontpoint. There are a few very large providers in Dallas, but there are also many smaller providers that have “standing out” problems. Korte believes that Frontpoint can distinguish itself in two ways, the first way is through quality and patient experience.
“Now that may sound like a boilerplate answer, but there are many home health agencies within a two-mile radius. [One Point Health] than anyone else in all of Washington state,” Korte said. “There’s a drain on quality, and there’s a temporary nature to staff. Our goal is to retain our employees and double the quality and patient experience. “
The second is the aforementioned MA strategy that few home health agencies in the area are deploying.
“We want to go after Medicare Advantage,” Korte said. “And it’s not that we’re going to take some MA, but traditional Medicare is going to be heavy on home health. We’re going to focus on adding value to hospitals and health systems by taking their MA patients and partnering with these MA plans.”
Front score depends not only on purchases, but also on de novos. For those new locations, he has his eyes on markets like San Antonio, Houston, Austin and Waco, Texas.
“Before we go in, we know exactly what the use is going to be in a certain area, and we don’t go into areas that are already well maintained,” Korte said. “But the goal I’m concerned about is this: We want to be the best home health and hospice clinics and support staff in our country.”
The future of Frontpoint Health
After all, Cortes — and MacDonald and Van Gundy — had an impressive record at EvergreenHealth.
“What we really did was take Evergreen from bankruptcy to one of the most efficient departments or units in the hospital,” Korte said. “Home care accounts for a significant portion of the system’s bottom line, which is something we’re really proud of. Being a nonprofit doesn’t mean you can’t have a positive financial outcome.
Moving forward, Linda Brabant will take over as executive director at EvergreenHealth Home Care. Korte still has trouble saying “we” when referring to EvergreenHealth.
Now, though, it’s transitioning from a non-profit agency to a PE-backed firm, though Frontoin says it doesn’t want to be labeled as “just another PE-backed provider.”
While going for-profit by working with MA may seem like a paradoxical strategy to some home health providers, Korte and his partners are confident in MA’s ability to build a viable, national business.
“We want to be the go-to place for them and make sure we’re value for the best rates and offer capacity and quality through direct partnerships with plans and health systems,” Korte said. There is nothing useful about this unless anyone is actually doing it.
The plan is to start in Texas, create some density, and then go to other regions of the country and do the same. Frontpoint, however, does not change the names of the organizations you contact. The goal is to centralize the MA focus and make things highly localized at the provider level.
“We may not even go with one EMR,” Korte said. “We don’t have the goal of driving efficiency for the sake of the bottom line. Our goal is to grow, win in markets and generate high volume.
Different MA strategies
Providers have been aggressive in the way MA plans pay for home health services, especially in the past two years.
Some providers have dropped MA patients from prepay due to staffing shortages and suboptimal plans. However, large suppliers have made it clear that they want to flesh things out with the MA plan to establish a more possible relationship in the future.
At the same time, there are examples of vendors taking Frontpoint’s more “hands-on” approach.
For example, private equity-backed, Tennessee-based HomeFirst Home Healthcare has adjusted its operations to cope with the fact that there are more MA users than ever in the markets it serves.
“It’s like any other business, your selling price is below your pay rate,” HomeFirst President and CEO Jim Happ told HHCN in June.
Corte subscribes to the same logic, which makes Frontoin the right person to lead.
As opposed to resisting, the company instead believes that adaptation is the best way forward. Only time will tell if Frontpoint’s approach is the right one.
“When you look at the evolution of Medicare Advantage — and that a wave is a wave — if you’re not involved in it, you’re going to be caught in that wave,” Korte said. “If organizations are not fully prepared to provide care at those MA rates and grow their organizations to increase that level of efficiency and value, they will fail and not last long.”
