Shelby
Livingston November 16, 2019 01:00 AM
About a decade
ago, Joseph Steier, CEO of long-term-care company Signature HealthCare, wanted
to move the company away from Palm Beach Gardens, Fla. He needed to find more
healthcare talent to grow the company, and he knew the post-acute industry
would soon be going through a painful transformation with the value-based care
shift and reimbursement cuts. He wanted to be near like-minded companies
dealing with similar issues.
Steier chose
Louisville, Ky., the land of the famed Kentucky Derby, mint juleps, barrels of
bourbon and, curiously, a bunch of healthcare companies that focus in some way
on the over-65 crowd. The city has long served as a headquarters for a large
cluster of senior-care companies, including skilled-nursing, assisted-living,
hospice, and home healthcare organizations that have helped drive its economy.
Medicare
Advantage giant Humana, home-health company Kindred
Healthcare, and assisted-living companies Atria Senior Living and
Trilogy Health Services are among those that call Louisville home and helped
build its $80 billion healthcare industry. For Steier and other startups and
entrepreneurs who would later set up camp there, Louisville represented a hub
of experts in the senior-care space—a place to grow and learn, troubleshoot
common problems and collaborate on best practices.
“Being around
those kinds of organizations that are smarter than you or more resourced is
just helpful for us. It’s really helped Signature a lot being part of this
Louisville ecosystem,” Steier said. Since it moved to Louisville in 2010, the
private company has grown from about 13,000 employees to 17,000.
But as home to
the largest cluster of aging care companies in the nation, Louisville thinks it
can do more than help the businesses that set up shop there. The city’s leaders
and its healthcare companies are betting they can solve some of the biggest
challenges the U.S. healthcare system is facing as Americans grow older in a country ill-equipped to care for them.
“There’s more
power to our own stories and our own strategies within our own companies if we
find ways to work together on common challenges, problems and opportunities
plaguing the healthcare system,” said Rick Remmers, a senior vice president at
Humana.
Senior-care
legacy
Louisville is far
from the only city with a large concentration of healthcare companies, but
what’s singular about this healthcare hub is that many of those businesses
cater to seniors. The city developed an identity as an epicenter of aging
innovation both organically and by design. One of its titans, Humana, was
founded in the ’60s as a nursing home company called Extendicare; its insurance
ambitions took hold two decades later. Now, it’s one of the largest Medicare
Advantage companies with more than 4 million Advantage members.
ResCare, which
provides in-home personal care services, was founded in the ’70s, along with
hospice provider Hosparus Health and a company that would later become Almost
Family, a home-health provider recently bought by LHC Group. Atria and Trilogy
came on the scene in the ’90s. Kindred, meanwhile, was born out of an earlier
venture that split in two. Humana bought a 40% stake in Kindred’s home-health
division last year.
A decision by the
city government to promote this natural identity as part of its official
economic strategy helped bring about an ecosystem of aging-related
organizations that surrounds the big guns. They include the Thrive Center,
which showcases technology for the senior caregiving space, startup accelerator
XLerateHealth, and the University of Louisville’s Trager Institute, which is
focused on research and innovation aimed at improving the aging experience.
Posting big numbers
Louisville, Ky.,
has developed into a healthcare hub, largely on the back of senior care. In the
metropolitan area, healthcare includes:
4,100 related
organizations
9 of the top 25
employers,
resulting in more
than $80 billion in revenue and 124,000 jobs that account for
18.2% of employment.
Source: Health Enterprises Network
According to the
Health Enterprises Network, created by the city’s Chamber of Commerce to
promote healthcare economic growth in Louisville, healthcare accounts for
124,000 jobs, or about 18% of the region’s employment, and nine of the top 25
employers are healthcare companies.
These companies,
like the rest of the nation’s healthcare industry, are dealing with immense
change in the way American healthcare is delivered. Care is moving from the
hospital to the home. Healthcare financing is shifting toward an emphasis on
the quality and cost-effectiveness of care, not the volume of services
delivered.
At the same time,
the U.S. population is graying. All of the baby boomers will have reached
retirement age in the next decade. That means 1 in 5 U.S. citizens will be
older than 65, and by 2034, seniors will outnumber children for the first time
in the nation’s history, according to the Census Bureau. As a result, aging
care is being forced to change, said Anna Faul, executive director of the
Trager Institute.
“It’s an industry
on the move,” she said. “It’s no longer you get older and you go to the nursing
home. It’s a different scenario: It’s you get older and learn to stay
independent and you focus on quality of life, you focus on how older adults can
flourish, and that has opened up many opportunities for these businesses.”
Senior care commands attention at
Louisville research institute
The University of
Louisville Trager Institute is putting its research on caring for aging adults
into practice.
The not-for-profit
wants to showcase how integrated care delivery can work in the community.
It recently built
out a clinic to provide primary care and specialized geriatric care, and it
trains at least 1,000 providers per year to care for patients holistically.
Instead of telling patients to eat healthier, the clinic will teach them how to
cook healthy meals in its training kitchen, which is still being built,
explained Joe D’Ambrosio, one of the leaders of the Trager Institute.
Some of Trager’s
other noteworthy endeavors:
Physiologists are
available to teach patients how to exercise in a gym.
The institute is
working with the university’s law school to develop an elder law clinic.
Technology-focused
efforts include a collaboration with students in other departments at the university.
In one project, the institute is working on a robot that can carry a patient
from the bed to the bathroom. In another it’s developing a toilet seat that
would weigh patients and send a message to the doctor if there’s a meaningful
change.
A council for
counseling
What if the CEOs
of these Louisville healthcare entities put their heads together to deal with
the challenges and find opportunities that are arising from all this change?
That was the idea behind the Louisville Healthcare CEO Council, formed in 2017.
The council—whose
board members include a dozen local CEOs from companies including Humana,
Kindred, Signature, and hospitals Baptist Health and Norton Healthcare—first
set out to find ways to support unpaid family caregivers. These overburdened
family members and friends provide $522 billion in free care each year,
according to a RAND Corp. study. That tab will grow as the population ages and
people live longer lives.
“We are all in
business to be successful, and part of being successful in the aging healthcare
innovation space is understanding the needs of the caregiver and recognizing
them as an important stakeholder when you’re dealing with a senior we might
insure, or Norton might be providing services for,” Humana’s Remmers said. “Yet
many of us weren’t sure, how do we support that caregiver? How do we help them?
What could we be doing more of?”
The council put
out a request for information and then a call for proposals to explore
solutions being developed to meet caregivers’ needs. It narrowed a pool of 200
submissions from all over the world to six young companies and brought those
innovators to Louisville to pitch their products or programs. Last month, it
recognized two of the startups as winners: St. Louis-based TCARE and Family
Directed-HomeHero, which located its headquarters in Louisville in 2018 in
large part because of the ability to collaborate and access talent.
Some council
companies, including Humana, are in discussions to implement the finalists’
solutions, though they haven’t disclosed specifics. Next, the council is taking
on social determinants of health, a spokeswoman said. Remmers said the council
may also tackle patient engagement and end-of-life care in the future.
Tammy York Day,
CEO of the Louisville Healthcare CEO Council, said the group is also developing
an investment fund specific to aging innovation, and discussing with Microsoft
Corp. creating a “data lake” to combine information from all the council member
companies for the use of researchers and innovators. (A data lake holds both
structured and unstructured data.) Mayor Greg Fischer announced in June that
Microsoft would partner with the city to launch a regional hub for artificial
intelligence.
Despite sometimes
competing, the council companies “understand that if we are going to provide
the national solutions needed—and how uniquely positioned we are to have all of
the continuum represented—then they have to work together to be able to do that
and they are willing to,” Day said.
There are other
cities with dominant healthcare industries and lots of venture capital.
Louisville is where you go to make real change in the senior-care space,
several sources said. The innovations that scale in healthcare are those that
create value by improving health and bringing a return on investment, said
Aaron Gani, former Humana chief technology officer who founded virtual reality
company BehaVR in Louisville in 2016.
“In our neck of
the woods, there’s a much more natural or deeper understanding of how does this
scale up? How do you create value in the system?” Gani said. “Not
just ‘can we create a new consumer-facing technology like Silicon Valley
might, or a new therapy like Boston is so good at?’ ”
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