The Value Based Care Market and What's Ahead: In Conversation with Adam Boehler

Eight months ago I launched Vital Signs to share analyses on companies and trends in healthtech. To those who have followed along so far - thank you! I’m now excited to add on a biweekly Vital Signs podcast. For my first guest, I’m kicking things off with Adam Boehler. Adam launched one of the first and most successful value-based care businesses – Landmark Health – and spearheaded many of the policies shaping the space today while in government. You can listen and subscribe to the podcast here on Spotify or Apple Podcasts.

Our conversation follows up on a recent piece I wrote exploring the current state of value-based care, the rise of risk-based businesses and where the space is headed. Value-based arrangements allow companies to build higher touch care models without having to worry about reimbursement for each individual service (fee-for-service). Over the last decade, value-based care has been partially implemented by healthcare executives and furthered by policy. But we’re seeing more and more health tech startups pitch taking on risk. Their care models offer the promise of providing more frequent care that better meets patient needs and helps them better manage their conditions. 

Adam is the perfect person to continue a conversation around this space. When Adam founded Landmark Health back in 2012 it was one of the early at-risk businesses. Landmark provides at-home care to complex chronic patients and was ultimately acquired by Optum for a rumored $3.5B. Adam then led the Center for Medicare & Medicaid Innovation (CMMI) where he introduced models furthering value-based care including direct contracting (which allowed primary care doctors to take risk on government-run Medicare patients), and value-based models in kidney care and ambulance care. Adam currently leads Rubicon Founders which invests and incubates value-based companies. They have three businesses today: Evergreen Nephrology (value-based kidney care), Honest Medical Group (partnering with primary care doctors to take on risk) and US Medical Management (home based primary care). 

During our conversation, Adam and I talked about how building a value-based care business has changed, how he came up with the idea for Landmark and his other businesses, what makes different patient segments a fit for value-based models and where the space is headed. We also touched on his hopes for future policy and the changes he’s seen in healthcare talent.

Here’s one particularly interesting section of our discussion where we dive into where at-home care makes sense and Adam’s process for starting businesses - tune into the podcast for the whole conversation. 

You were one of the early pioneers in at-home care. The space has become increasingly popular over the last decade with people trying to move everything from hospital care to urgent care into the home. As you think about the care model of the future, what care does and doesn’t make sense to provide in the home?

It’s so funny because when we started Landmark at-home care was not a cool thing to do. Everyone was like - why would you do that? It’s going back to the 50s. There’s a TV doctor everyone would bring up. And now people say it’s all moving in the home - McKinsey had it in their 10 Healthcare Trends.

I’d probably divide at-home care into two different areas. One would be convenience care, the other is really complex care. Landmark was the latter. Convenience care like Amazon Care, with a strong virtual component, can make sense. But you want to do at-home care for complex, chronic patients. 

Where I think you can overapply the model is that all care should be delivered in the home. It’s one thing if there’s a set of people that want to pay for convenience. But you can’t really affordably drive all care to the home all the time. Sure I’d love my physician to come to my home but I’m not a complex chronic patient. That’s not a good use of healthcare resources or that physicians’ time unless I want to pay a lot for it. 

At home care is like anything. At first everyone says that’s not possible and then it changes around the other way where people want to do it all the time.  

Now people recognize Landmark’s business model works. But you were pioneering a lot of things. How did you even come to the idea of Landmark? What did you see that got you excited?

We didn’t set out to build a home-based company at all. My approach whenever I work on businesses, including at Rubicon, is to start with the root of a problem. With Landmark we started with there is a broad issue with chronic patients and expenses are high. So what do you do about it? It can’t just be something that sounds good. There are certain things that sound good like, “let’s bring home care to everyone.” That doesn’t make much sense. So we looked at what actually worked to impact Medical Loss Ratios and improve quality.

A test for all of these businesses is what does specific data say? Everyone has an opinion. But the United States is a big place - usually you can find places where there’s data from things that have been applied. You don’t need to invent it from scratch. I don’t make compounds. There’s no fundamental science in my work. There’s always analogues to our businesses. 

In this case, the Department of Veterans Affairs (VA) published a couple studies on their home-based primary care model. The VA’s intended goal with home-based primary care was not to save money - that’s not usually the goal in government. But it was a byproduct. We read the studies and thought we could unlock a lot of value through doing it. We unlocked what we did because of changing incentives from fee-for-service. 

We also put the care model into place for a specific purpose instead of starting the other way around and saying, “it would be really cool to offer these services.” Because it is really cool to offer these services. But starting this way helps you find the right sustainable financial model so it doesn’t just go away or have to be a non-profit.

Check the rest out here on Spotify or Apple Podcasts.