Healthcare

What TheKey’s Private Duty Push Says About Diversification – And Integration – In At-Home Care

This article is a part of your HHCN+ Membership

Earlier this week, I reported on TheKey’s push to expand from a business largely rooted in personal home care to a larger footprint in private-pay nursing.

It’s not every day that a provider of TheKey’s scale makes a concerted effort to diversify its offerings, and it’s not an easy endeavor. Home health and home care have different DNA, and TheKey is hiring new leadership and prioritizing consistency to maintain quality while pushing for growth.

A push like TheKey’s comes with a variety of challenges, from licensure to leadership and beyond. CEO Chris Gerard is taking on six states for the company’s push into home health, planning to offer the services alongside its personal home care offerings. This creates the opportunity for package billing.

This transition also illustrates the changing face of the home care industry. The days of clear siloes and traditional billing models are quickly fading, and personal home care providers are becoming a key part of the health care continuum. Of course, many prominent companies offer a variety of clinical and non-clinical services in the home – but the benefits of doing so have not always been clear or fully realized, and the trend toward diversification has not been linear. Consider that in 2023, Amedisys – shortly after Gerard exited as the company’s CEO – divested its personal care business to HouseWorks.

“Our personal care division was started with the sole mission to provide patients with a true continuum of care in the home,” Amedisys Chairman and CEO Paul Kusserow said at the time that the deal was announced. But the scale of the Amedisys personal care division was dwarfed by its home health and hospice business lines; in 2022, personal care accounted for $61.4 million in revenue compared to $1.4 billion for home health and $788 million for hospice.

TheKey’s push offers an interesting case study in how a provider in the current environment is going about diversification – and spinning up a private-duty nursing business that can achieve meaningful scale as part of a business that already spans 30 states is one particular challenge that Gerard is focused on. He obviously has a wealth of experience to inform his decisions.

In this members-only, HHCN+ Update, I’ll share my insights into TheKey’s private pay home health push, offering analysis and key takeaways, including:

– The operationalization steps that it takes to cross the home-based care aisle

– Why these processes can be worth it to usher in the next era of home care

– That the future of home-based care involves dissolving labels

Operationalization

From licensure to compliance infrastructures and clinical oversight, there are a variety of needs that must be addressed in the home health world that are not present in the pure-play home care industry. One of the changes being made by TheKey involves bringing on a new president of concierge care, I learned from Emily Kraeter, head of human resources function at the company.

TheKey has pretty extensive resources due to its size – the organization operates in 60 markets, from 100 locations, in three countries. It provides care for 13,000 clients annually and employs 10,000 caregivers. I imagine that scale makes it easier to bring on key leadership talent and provides some of the infrastructure needed to build out new structures.

But the necessary changes must go far beyond new leadership, and Gerard hinted at some of the challenges the company might face in this regard as the business grows.

“Thinking about what’s going to be our challenge … [it’s] making sure that we still have a standard model that we’re operating under that can scale; it gets more difficult to grow the bigger you are,” he told me. “Our average location is about $5 million in revenue. So finding and delivering double-digit growth on that basis becomes more challenging, but we also know that we have a lot of opportunity around direct-to-consumer marketing. We have a lot of opportunities around making sure that we provide a great experience, which drives client retention and delivers growth.”

Gerard isn’t planning on launching the company’s home health offerings across the company’s entire footprint, or even most of it. The company is beginning by expanding into six states where it already operates as a personal home care provider. But scaling can create tension, as Gerard mentioned. Ensuring the continuity of company culture and leadership identity can be a challenge for any organization undertaking such an expansion.

Licensure is a key part of the operationalization process. Gerard did not say that any problems had arisen with this element of the expansion, but he did say it took months. As the company seeks licensure in all six states, I would wager it may encounter unforeseen delays or challenges.

I’ll be excited to catch up with Gerard as TheKey progresses on its new top priorities. I’ll be interested to see if other providers, especially smaller ones, follow suit. The challenges inherent to this transition may keep all but the boldest in their lanes – for now.

Dissolving labels and new opportunities

The clinical benefits of one provider offering multiple services are, to me, totally clear. When my grandmother received both home care and home health services, keeping tabs on who was coming when and which provider organization was in charge of what was a regular challenge. So I imagine many other families face the same pressures, and being able to employ a nurse from a company that you already trust to deliver home care seems like a no-brainer.

The financial benefits of diversification, as I said earlier, are also clear. Not being limited to one revenue stream is generally a good idea for almost any business.

One of the most interesting elements of TheKey’s new arrangement is the potential for package offerings. The shift away from traditional home care billing processes has become evident in recent years, with providers developing short-hour or task-based billing. 

The overall importance of TheKey’s shift is that it demonstrates home care’s place in the health care ecosystem. Beyond TheKey’s newest initiative, it’s clear to me that the home care industry has fundamentally changed. Traditional labels for these organizations are dissolving as home care increasingly becomes involved with the rest of the health care continuum, including through programs like The Guiding an Improved Dementia Experience (GUIDE) Model. These transitions may mean the beginning of a new era for home care, in which the client and their family do not distinguish between the different branches of their in-home care plan, and the provider therefore can’t afford to distinguish between home care and home health. 

Crossing the divide to become a true multi-service provider will not be simple. Especially if providers try to branch into Medicare reimbursement, the operationalization hurdles may prove too much for all but the savviest and most forward-looking of home care providers.

But, if you’ll excuse the turn of phrase, the key for TheKey – and other organizations adding clinical service lines to their personal care businesses – will be not only diversifying their business but providing an integrated model that serves clients, payers and other stakeholders.

The post What TheKey’s Private Duty Push Says About Diversification – And Integration – In At-Home Care appeared first on Home Health Care News.

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