Univita shuns fee-for-service

Tuesday, January 26, 2010

SCOTTSDALE, Ariz. - There's a new player in the HME industry, and it's bringing an unusual model with it.

Univita Health, a provider of aging-at-home services, acquired Atenda Healthcare Solutions in January. It's the company's first foray into HME, said Mark Reagen, chief marketing officer.

"Our goal is to become a single source that helps people get the services they need to stay independent in the home," he said. "We see DME as a big part of that service."

Univita formed in December 2008 and is backed by Genstar Capital, a San Francisco-based private equity firm. Univita coordinates in-home care and other services for managed care and long-term care insurers through a network of contracted providers. Davie, Fla.-based Atenda Healthcare offers infusion, nursing and DME to more than 1.3 million patients for managed care companies.

"Atenda was really the only company we found that had this model of what we think of as the three legs of home health--skilled nursing, DME and infusion, under one roof, through one central intake and providing all three services to health plans," said Peter Goldstein, executive vice president of business development for Univita.

Building such an integrated platform--and using a capitated model--helps to drive down costs for patients and payers, said Goldstein. "It aligns everybody's interests to make sure these costs are managed as opposed to a fee-for-service free-for-all."

With the senior population set to double in the next generation, it's crucial to find ways to keep people in the home, said Reagen.

"We can't rely on hospitals and nursing homes," he said. "The home has got to be the place where you can age and live your life."

Combining HME and home health services is not a new concept, but neither is it all that common. One HME company that has made it work is High Point, N.C.-based Advanced Home Care, which has offered an integrated platform since 1993.

"If everybody puts the patient at the center of the equation it can really work," said CEO Joel Mills. "If the patient can deal with one company, and all the departments are coordinated, it's less stressful for the patient. We believe the patients receive better, more seamless care."

Univita has a regional presence in several states including Minnesota, California, Tennessee and Massachusetts. In its first year, the company earned $200 million in revenues.

Univita plans to continue its strategy of growth through careful acquisitions, said Goldstein.

"Rather then roll up DMEs across the country, we would rather go broad in smaller geographic areas," he said. "Health care is a national problem, but it has to have a local solution. Each market is different."