The Story Behind Allina Health’s Spin-Out of Inbound Health
In October 2022, Minneapolis-based Allina Health and investment firm Flare Capital Partners launched a company called Inbound Health that enables health systems and health plans to offer hospital-at-home and skilled nursing-at-home programs. In a recent interview, Julia Crist, the company’s chief operating officer, gave a glimpse into how the spin-out from Allina came together.
At the time of the launch, Allina said the new company provides the full stack of capabilities that are required to scale at-home care models including home-based care pathways, virtual care teams, engagement and workflow technology, analytics, supply chain partnerships, operational oversight and payment models. It added that the company offers a flexible partnership structure, enabling customers to leverage their existing assets and capabilities while relying on Inbound Health to fill the gaps required to scale these programs across their service area.
HCI: I saw from your biography that you worked for almost eight years at Allina in the home and community services and senior care transition space before joining Inbound. Are there some lessons you learned in those positions that guided you in helping to establish the new company?
Crist: I oversaw the Home and Community Services Division, which was about 1,500 dispersed employees who were caring for an average daily census across all programs ofabout 4,000 patients in their homes. We have programs like home health, hospice, palliative care, a geriatric medical practice called Senior Health, so it was really the collection of services for a line of health that were all in either external facilities that Allina owns or in patients’ home. The whole purpose of that team was to allow for a really smooth care continuum. We were doing so much fun work in terms of, innovation and development, particularly for seniors who were on Medicare Advantage plans or where Allina was taking partial or full risk.
We spent many years studying alternative models. ultimately landed on a few things as priorities for Allina. The first is having a really good patient identification and stratification model — knowing who are the low-risk, rising-risk, of high-risk patients. We focused our efforts on building programs for high-risk patients When we studied our high-risk category, they are folks who are homebound. They can't make it to the clinic safely anymore. They're the patients who are using the ED multiple times a year and ending up in the hospital with subsequent skilled nursing facility stays or home health stays. The utilization for that cohort is incredibly high. We studied those patients and their families. We focused on caregivers as much as we focused on patients. What help and support do they need, and how can we build programs that perform for those needs to keep patients out of the hospital? We built a home-based primary care program called Complex Care for Seniors, where we use that identification stratification model to find the patients who are high-risk and actually brought care into their home.
HCI: Did their current primary care clinicians start traveling to their homes? Or do you have clinicians specialize in home-based care?
Crist: It is a transition from a clinic-based providers to a home-based providers who are dedicated to that, mostly geriatricians, because that's who's really good at providing that kind of wraparound care. It was very much worth the investment of bringing care to the home.
HCI: How did you get into acute hospital at home?
Crist: We started studying hospital at home in 2019. We did a really robust build vs. buy partner assessment, and we again tried to understand our target population — high utilizers, specifically seniors — how can we keep them home safe and have high-quality outcomes? We learned about all the offerings that were available, and at that time, there were not a lot of choices for hospital-at-home partners for health systems. I didn't want to build a new program. I was really hoping to partner, but when I talked with the companies out there, which are great, one of them required a joint venture and I just didn't have the resources to create and manage a joint venture. Also, we didn't see evidence of scaling. Another one was just way too expensive.
We realized that our best choice at the time, given the partner possibilities, was to create a program. BUt we put that plan on the shelf in 2019, and we thought this is expensive to build and is going to take a long time to build. We needed to have enough volume of those high-risk patients who are also under a managed care contract with Allina. We needed to reach a certain threshold before it even makes sense. Then a few months later, COVID hit and we took that idea off the shelf because suddenly our hospitals were at capacity — the same story that everybody else had. We very quickly allocated team members from the home care teams. We took those geriatricians who are doing primary care in the home and skilled nursing facility care. We took home health nurses and therapists and combined them into this new home hospital care and very quickly started to see patients. We grew from five to 60 patients in average daily census at that peak in the pandemic.
HCI: What were some of the most challenging things about this scaling up? Was it getting the right workforce to match the scope of what you were trying to do?
Crist: That is a challenge. However, Allina was advantaged in that it already had all of these team members in place. As I was talking to other health system leaders, we were becoming recognized for creating a program and scaling. The part of the program that is unique to Allina was really that physician and nurse practitioner workforce who are expert at providing post-acute care. They know which kinds of patients can move from the hospital. Having that set of team members is really what made Allina very successful. They also thought very differently than a typical hospitalist would about who is appropriate for the program. The challenge was pulling together a safe, program that required a lot of handoffs between tons of team members, and then arranging for all of the supply chain capabilities.
HCI: Is there a technology platform that coordinates all that?
Crist: That is what we're using the investment from the venture capital groups who invested in Inbound to create. The business case didn't really work out when I was looking at it as an administrative leader. But we built Inbound to bring together all of the components that are needed to provide really good hospital-at-home care into a central model and that can all be provided to multiple health systems virtually and at a much lower price point than building it on their own.
We are bringing all of those services as well as the tech side that makes all of the supply chain easier. We're bringing the partnerships and the contracts with supply chain leaders. We bring on a managed care contract reimbursement model that we've created and have multiple contracts that health system partners are able to contract with. So it's about bringing everything you need for this specialty medical practice and plugging it into a health system, but the health system can have their own program. It's branded by the health system, built out the health system and it's all at a lower price point than if you would have to do this on your own or with the alternatives.
HCI: Was there a light bulb moment when you had the idea to spin out what Allina was doing? Because that was not the initial plan, was it?
Crist: It was not the thought initially at all. It was totally a light bulb moment. I spoke with more than 50 health system leaders who were in similar roles to me and I kept hearing the same thing over and over again. They said ‘We looked at the vendors, and for these reasons, it doesn't work. They'd say ‘Tell us how you did it.’ And when I did tell them, they said, ‘We don't have the infrastructure to build that.’ But they all needed it and understood the value. We saw there was a market opportunity. It seemed there was not a health system-friendly option out there that empowers the health system to disrupt themselves. That was the other thing that made Inbound unique is that we designed it from a health system perspective for health systems, and the way we are flexible to work with existing teams, the way we enable health systems to get on contracts — all of that is setting up the health system to be successful without harming their current business.
HCI: Do you have some health system customers outside of Allina yet?
Crist: We have one that is currently signing the management services agreement, so we will be starting in their market in October. We'll be able to share soon who that is. We’ve signed a letter of intent with another partner. They're both multi-state health systems who have their own home health assets and a lot of the supply chain components like durable medical equipment and lab, but need the kind of plug-in services that Inbound brings.
HCI: You mentioned that for Allina and for a lot of other health systems, the pandemic made this urgent. Do you think that feeling of urgency has diminished at all?
Crist: Not at all. It's been fascinating to see the reaction of health systems. I thought we were going to run into a lot of resistance to explain the value that Inbound brings. Every single health system we've talked to gets it. They understand the problem and they're assessing their options. Every health system we've talked to has major capacity constraints — either on the front end, the back end or both. That is causing a huge issue for health system flow, which means that patients are staying in the hospital longer. The reimbursement revenue that's retained from a stay is getting lower, because more bed days are being eaten up. So there's a big financial issue that exists across most hospitals that comes from longer length of stay and fewer workers.
HCI: CMS extended the hospital-at-home payment waiver for another two years. But would the tools and services Inbound is developing make sense even if CMS stopped paying for acute hospital at home?
Crist: Yes, there's a business case to be made without the waiver. When you think about just the SNF-at-home portion, the value to a hospital is reducing the length of stay and creating what is often incremental or new business for them. Because most don't own skilled nursing facilities. And you're solving the problem of finding a location for somebody to go to. The number of skilled nursing facilities that have been closing is pretty shocking. You can meet patient needs with a SNF-at-home model and it works financially by reducing the length of stay.
HCI: What do you think that CMS and Congress will be looking for in the next two years as far as evidence that this model is worth continued support?
Crist: Probably a lot of quality and cost data, right? It is a novel program in this country. We certainly have a lot of evidence from other countries that have been doing this for years and years, but they're looking for quality outcomes, wanting to ensure that this program is safe. I think they're also going to be spending a lot of time trying to understand the cost structure of providing this type of care. Another thing they're thinking about is licensure from a regulatory perspective — how do they regulate this? Is it regulated as the hospitals are regulated or as home health, or something different? They have a lot of evidence already that this reduces costs, that it improves quality outcomes. Now they've got to get to work on the price to pay and what is the regulatory and compliance structure to put in place.
HCI: Your CEO is Dave Kerwar, who came from Mount Sinai. Were there some things that he built or saw at Mount Sinai that he brought to Inbound?
Crist: Dave was the right leader for us at Inbound for a number of reasons. He was the chief product officer at Mount Sinai, so he really understands about building new products and launching them in systems. He has a business degree but also was originally a programmer so he really understands the tech side as well as leading people. Before working at Mount Sinai, he spent time at Aetna, where he created joint ventures between health systems and Aetna. So that is another helpful experience that he's had when it comes to Inbound because he understands how managed care organizations create partnerships.
