March 8, 2022
[00:00:06] Gary Bisbee, Ph.D.: Travis Messina’s father was a surgeon and his mother taught AP biology. Travis’s interests were primarily finance and business. So how did he become a founder and CEO of a leading hospital at home company? Let’s find out. Contessa Health works with hospitals to bring high acuity care to the patient’s home. Patient care is delivered through a multidisciplinary team that coordinates in-person and virtual care. They use a multimodal technology suite of services, such as remote patient monitoring and their unique ID platform, called Care Convergence. Travis describes how Contessa’s approach was driven first by their clinical team envisioning clinical delivery, and then building the financial model to support that vision. He shares that the most fulfilling component of their work is the high patient satisfaction rate of over 90%. Travis reviews, the evolution of reimbursement and governmental regulation for hospital at home, and how Contessa works with Medicare Advantage, we discuss the acquisition of Contessa by Amedisys and how Amedisys will bring the all-important scale to Contessa. For early-stage founders, Travis emphasizes that team is everything. When founding a company, hire people that are smarter than you and trust their judgment. Finally, recognize the importance of balance in your life.
Well, good afternoon, Travis. And welcome.
[00:01:37] Travis Messina: Thanks for having me here. It’s a pleasure to be here.
[00:01:40] Gary Bisbee, Ph.D.: Can you describe Contessa today?
[00:01:42] Travis Messina: Absolutely. So Contessa is a high acuity home care operator. We partner with health systems to take patients of varying degrees of acuity and treat them in their homes. So we started with Hospital at Home. We now have SNC at Home. And then we most recently added palliative level care at home.
[00:01:58] Gary Bisbee, Ph.D.: The timing is everything of course, in life and starting companies and so on. Looking back on it, was 2015 a good year to form up and start Contessa?
[00:02:11] Travis Messina: I think we almost were ahead of our time. I think it was very close and COVID and the pandemic, associated with the time that came about, late 2019, early 2020, we weren’t about to go under, by any stretch of the imagination, right? That was not the case. But, it was very challenging to get payers to understand that health systems wanted this as a viable service offering. And the general response from health plans was, why on earth would a health system want to do this if they’re not at capacity or they don’t own the premium dollar? And so trying to communicate that benefit health plans, was a challenge. And so ultimately, COVID comes along and you have this catalyst of capacity constraints. And now you’re continuing to experience that, not necessarily from a licensed bed perspective, but from a staffed beds perspective, because of obviously the turnover with providers. Like you said, it’s luck and timing, right? So the timing worked out and there was a lot of luck that was played into that, but we did have a very high-quality model and we had had demonstrated benefits as I would say probably the largest hospital at home provider in the country. And so that has continued to benefit us through COVID and, hopefully with this becoming more in the rearview mirror, will continue to be a benefit for health systems going forward.
[00:03:27] Gary Bisbee, Ph.D.: Well, I’m sure you will be. You mentioned the word quality and I’m sure our audience is interested in that, but what is the clinical approach, if I can ask it that way, Travis, that Contessa uses?
[00:03:40] Travis Messina: Absolutely. I mean, that’s essential and it’s foundational to everything that we do at Contessa. So again, we’ve talked about my finance background. When we started the company, Mark Montoney, who was the Chief Medical Officer at Vanguard Health, he was our founding Chief Medical Officer. And a principle that we implement and we still hold today at the company, when we’re looking at a new model, the clinical team has to come up with the model first to say, how can we safely and effectively treat these patients? And naturally, being a startup, Mark would say, well, I don’t know that we can do this in a cost-effective manner. I said, hey, that’s not your job. Your job is to figure out how to take care of our patients in the best possible manner. And then it’s on the operations and finance team to come up with a reimbursement model that supports that clinical delivery aspect. So it was never driven by a financial model. It was, create the clinical model first and then come up with the financial model that supports that delivery. And I think that’s ultimately a challenge that home-based models face in our healthcare industry. They say, oh, they’re not scalable. And we couldn’t disagree with that belief more because, if you have the right reimbursement structure, you can make a home-based model very, very scalable.
[00:04:51] Gary Bisbee, Ph.D.: Are there actual protocols developed for each disease condition?
[00:04:58] Travis Messina: Yes. So, when Mark and the clinical team, because obviously everything is a team-based approach here at Contessa, it was multidisciplinary in nature. They created very specific protocols for the conditions that we knew were likely to be the most prevalent in a hospital at home program. So congestive heart failure, COPD, pneumonia, things of that nature. We have very specific clinical protocols for those disease states. Ultimately, Mark, in conjunction with some of our other team members, came to the revelation that, for this model, it’s very hard for a clinician to see a patient and squarely place them into a disease state upon presentation. So we need to flip the script. And ultimately what they came up with is this workflow of, does this patient need hospital or institutional level care? If yes, can we safely treat the patient in the home? And if the answer to that question is yes, well then figure out what the condition is later. And so that led them, Gary, to create a general medical protocol for a substantial portion of the patients that we treat. And so it was sort of that change in mindset and, honestly, using our old hospital approach of a working DRG, for lack of a better description, that enabled us to broaden the population that we can address with our programs.
[00:06:13] Gary Bisbee, Ph.D.: So, what are the levels of the people that actually go out and make a home visit? Is it an RN or some other type of individual?
[00:06:23] Travis Messina: So the care team for the Contessa model is multidisciplinary, as we mentioned. So it starts with the admitting hospitalists. Those visits are overwhelmingly done virtually. Now, when we talked about scalability a second ago, if you had to have physicians go into the home for every single visit, that would not scale. And so we start with the hospitalists, with virtual rounding. We then have an RN that goes into the home at least twice a day, and they are at the bedside. And we think it’s really important that you use RNs for that. You can’t substitute with a different licensure because then it wouldn’t be hospital level care, Gary. Those RNs are going into the home. And then lastly, we have a recovery care coordinator, who is also a registered nurse that is virtual. And think of them as sort of the virtual charge nurse of the program. So you have admitting hospitalists virtually, you have our acute care RN that goes into the home to be the nursing service, and then a recovery care coordinator that is also an RN. We do have other team members that support ad hoc, right? We’ll have admission partners who are more administrative in nature. We have social workers who come in as necessary. But the three that I mentioned at the outset are the primary care team members.
[00:07:27] Gary Bisbee, Ph.D.: So I’m assuming governmental regulations are involved here. Where do we stand in that regard?
[00:07:35] Travis Messina: Government regulations absolutely play a big role in the program. Prior to COVID 19 and the public health emergency, medicare fee for service did not reimburse for hospital level care at home. Contessa actually secured the first reimbursement from a national payer and it’s predominantly in the Medicare Advantage line of business. But with the public health emergency, they created a waiver that’s associated with the Hospitals Without Walls waiver. And if a hospital can present the ability to meet certain clinical criteria from an administrative, operational, and clinical practice they can receive a one-time or an individual waiver for rendering hospital care at home. I’d say the program has been very well received. There’s several hundred hospitals that have signed up. Hospitals continue to sign up today. But it is directly tied to that public health emergency. And when that ends, so will the waiver and hospitals or other programs will not have the ability to treat Medicare fee for service patients. That’s why it’s critical that you have a strong managed care strategy. For us at Contessa, our roots were in Medicare advantage. That’s where we started. And we were operating the program successfully without Medicare fee for service. So having that approach is extremely important. And as you know, when you operate in the Medicare Advantage world, doing so in a regulatory compliant manner is absolutely critical. And so you have to structure your programs to meet those regulations.
[00:08:58] Gary Bisbee, Ph.D.: Having the waiver extended or actually developing a broader approach to accommodate this is really important. I’m assuming that there’s various associations and others that are lobbying Congress in that regard.
[00:09:13] Travis Messina: Absolutely. As you mentioned, there are a number of efforts to create a sustained reimbursement model from CMS. At Contessa, we feel very strongly that it needs to be value-based in nature. If you’re taking a patient that historically was treated in the hospital and you move them home, you are having a site of care shift. However, due to the, I’ll say, nascent stage of the model, you have to be able to demonstrate to the risk-bearing entity managed care organization or CMS in this matter, it’s Contessa’s believe that you don’t want to just do it on a DRG basis or even a discounted DRG basis because, if you take down that unit cost, because it is still a relatively new model, if you don’t manage those patients appropriately for an extended period of time, those patients could end up back in the hospital and increasing the total cost of care. So we feel very strongly that it should be a value-based arrangement. The current waiver from CMS pays the full DRG rate. And so it’s not creating financial value for CMS because they are still paying the same rate that they would pay for a traditional hospitalization. So when you look at Contessa’s managed care contracts, all of our managed care contracts are value-based in nature. So we look at the 30 day spend. We prospectively discount that because there is a site of care shift. And if there are complications that result in excessive spend, Contessa, along with its partners, are on the hook financially for that spend.
[00:10:36] Gary Bisbee, Ph.D.: Why don’t we move from reimbursement to technology? What technology is involved right now with Contessa and your program?
[00:10:44] Travis Messina: So Contessa uses a multimodal technology suite of services to make these programs effective from a quality standpoint, but also administratively efficient. So first and foremost, we use remote patient monitoring capabilities. This is not proprietary. There are a number of RPM capabilities there in the market, and that is primarily to enable that physician that I mentioned that is virtual to see the patient, capture vital signs related to pulse oximeter or blood pressure cuff, virtual scales, virtual stethoscopes, things of that nature. Contessa did develop a proprietary IT platform called Care Convergence. And this is essential on two fronts. First the administrative logistics associated with hospital care in the home. As you know Gary, the patient shows up at a hospital, you have to have turnaround times that are pretty instantaneous, right? You have to be able to get labs. You have to be able to get a nurse or a physician in to see that patient. When you’re rendering that same level of care in a distributed manner, you now have to manage those logistics and meet the turnaround times of a hospital. So Care Convergence enables us to track the infusion drugs, the care team members that are going to the home, the care team members that are virtual, the durable medical equipment, and see where all those elements are in real time to make sure that we’re not jeopardizing the quality of care because those administrative requirements are quite significant. So managing the logistical coordination is a primary component of our proprietary technology. The second primary function of Care Convergence relates to our value based arrangements. So we actually pay claims in our managed care contracts. And so making sure that we can ingest claims data, underwrite that claims data and have the analytics associated with that, and then again, pay the providers that are a part of our program, is essential. And so managing those value-based components is a capability of Care Convergence.
[00:12:36] Gary Bisbee, Ph.D.: Well, what’s been the reaction of the patients and the patients’ families to the Contessa program?
[00:12:43] Travis Messina: That’s probably one of the most fulfilling components about being at Contessa. And I know our entire team feels this way. Patient satisfaction is an all-time high. If you think about it, we are creating optionality where it previously did not exist. If you needed hospital level care and you showed up at one of our partners’ health systems, you had two options: you either get admitted or you leave against medical advice. And creating that third option, Gary, really creates a tremendous increase in patient satisfaction for hospital level care. So our net promoter score, or patient satisfaction, is in excess of 90%. When we have patients that are offered the program, because of EMTALA, patient shows up, they need hospital level care, you can’t force them to go home. So we have to get informed consent. 90% of the time, patients accept it’s actually in excess of 90% of the time. And so having the ability to receive that care at home, recover at home, and be around your loved ones when you’re having what is an extremely frightening event naturally leads to pretty tremendous patient satisfaction.
[00:13:44] Gary Bisbee, Ph.D.: What’s the general reaction of the provider health systems to the Contessa program?
[00:13:50] Travis Messina: The general reaction can be touched on a number of different fronts. First, and I say this as a non-clinician, being the finance person, it’s always important to pay homage to the fact that I am not a clinician. So, but I think that our clinical leaders, Dr. Moskowitz, Dr. Nottage, Dr. Montenay, when he was still with us. They would say that the surprise from health providers that you can offer this level of care in the home is pretty tremendous. Naturally you’re taking a patient where these clinicians have been trained their entire life to send them to the floor. Now you’re asking them to send this patient home. So there’s some skepticism and I’d say it’s appropriate skepticism. But once they see the clinical outcomes and the quality that these patients can endure from Contessa’s programs, the buy-in is pretty tremendous. So I think that that’s probably the most notable. Secondly I think that the receptivity from health system providers to take a patient that historically would be treated in one of their beds to go home. The desire to be a part of that movement and have this as an offering, it’s not of, why should I do this? It’s, why shouldn’t I do this? And so seeing that reaction is pretty tremendous as well, And then lastly, what I’d say is that the reaction is that this is the standard of care and it will continue to be so going forward. That to me shows a significant shift in the mindset of the administrators, not just clinical, but when you have CFOs COOs, CEOs of health systems saying that we need to do this, I think that that tells you that this is beyond a nice to have during eCOVID, but it is an essential part of their toolkit going forward. We have partners that range in different sizes and scale, right? We’re partnered with Ascension St. Thomas. We’re partnered with CommonSpirit on the west coast, Mount Sinai, Prisma Health in South Carolina, and a number of others. Marshfield clinic in rural Wisconsin. It shows you that this is not a one size fits all, that there are many different archetypes for this model. And I think you’ll continue to see that going forward.
[00:15:52] Gary Bisbee, Ph.D.: Well, you’re out in the market all the time. What’s your sense of the pace of change over the next five years?
[00:15:59] Travis Messina: I think the pace of change is going to be remarkably quicker than the analogy that I’ll use to describe the model. I had mentioned the business plan, formative stages, and the analogy was that, if surgery centers can partner with health systems to move low acuity surgical procedures, then we should be able to do the same for medical. And so I’ll use another surgery center analogy. If you go back to the early eighties, when CMS first began reimbursing for surgical procedures in an outpatient setting, about 6 or 7% of all surgical volume was done on an outpatient basis. And so that was either at an HOPD setting or in a true ambulatory surgical center. As CMS began reimbursing for more services, as providers began performing procedures in that setting, they became more comfortable with the model. And then ultimately consumers realized that this was a safe and effective way to receive care. You had surgical volume in the United States moved to two thirds on an outpatient basis. So I think you can see that same trend in hospital care at home. And I wouldn’t confine it just to hospital. SNC care in the home. Palliative care in the home. I think you’ll see a tremendous uptick. I do think that the adoption curve will be much steeper because an unintended byproduct of COVID is that it showed those providers that this can be done in a safe and effective manner. And so it won’t take them quite as long. And so I think you’ll see the same thing play out with medical conditions.
[00:17:21] Gary Bisbee, Ph.D.: We like to get to know our guests a bit. Why don’t we start with your life in the early days. What was life like growing up for you, Travis?
[00:17:30] Travis Messina: I grew up in Louisiana in a family of clinicians. So my father was a surgeon. My mother actually got into medical school, but ultimately decided to raise four kids and do an amazing job doing that. And then ultimately she went back to teaching sort of AP biology and chemistry because of her love of science. And so, a lot of days or weekends rounding with my dad on his patients in the local hospital, which I think probably created that first interest in healthcare.
[00:17:58] Gary Bisbee, Ph.D.: Yeah. So did you think you’d be going into healthcare at some point?
[00:18:03] Travis Messina: I actually didn’t, I was more enamored with kind of financial markets or capital markets. Actually, I remember it because my oldest daughter just had her first junior achievement course. I had a junior achievement course in around probably sixth or seventh grade that really created the bug for the financial markets. And so I pursued a finance and accounting path. Although a quick aside. I had the benefit of observing a surgery at one point much later in my career. This was probably 15 years ago and I’ll never forget it. It was a micro diskectomy and I went home pretty upset at my father because he had pushed me away from medicine. He was like, you don’t want to be a physician. You actually want to be on the business side of it. So, perhaps I missed my calling.
[00:18:41] Gary Bisbee, Ph.D.: Well, it’s not too late, Travis, can always go back. Well, what was the young Travis like terms of leadership? What did you think about leadership in your early days?
[00:18:52] Travis Messina: That’s a great question, Gary. Well, a lot of people I think have started to know this about me since I started Contessa I actually have a background in music, so Contessa is based in Nashville. I actually wanted to go to the Berkelee College of Music. And so specifically as it relates to the leadership aspects, naturally I had a band in middle school. I was the one that handled all of the business aspects. And so, I would handle the bookings. And then, when we released our first CD, kind of figured out how we would divvy up the proceeds from selling things and would manage all of those aspects. And so naturally just kind of slid into a leadership role. It’s not something that I sought out, but when there’s something that I feel very passionately about, if that leadership role is not filled, I just kind of naturally go to it to make sure that the mission can move on. So, it started in the music business and then kind of naturally evolved from there.
[00:19:44] Gary Bisbee, Ph.D.: Well, what instruments do you play?
[00:19:47] Travis Messina: I’m a guitar player.
[00:19:48] Gary Bisbee, Ph.D.: Okay. Does Contessa have its own band at this point, Travis?
[00:19:52] Travis Messina: Not yet, but Amedisys, the new organization of which we’re a part, has a band and there’s a spring crawfish boil down in Louisiana. So hopefully looking forward to sit in with a few folks down there.
[00:20:03] Gary Bisbee, Ph.D.: That’s super. When you went to Vanderbilt to get your MBA, what were your aspirations? You had mentioned finance earlier. Was that the idea?
[00:20:13] Travis Messina: It was. So just kind of the quick background to round out the early years. So I studied international finance, went to Wall Street and was a summer analyst with an investment bank, but ultimately decided not to pursue that path right out of undergrad, did something different for a few years. But then did indeed go back to Vanderbilt with the explicit purpose of rounding out the financial and accounting acumen so that I could go back into investment banking, I had a very specific interest in mergers and acquisitions. And so that was my sole focus, be able to get that position with an investment bank to do M&A and that is ultimately what I was able to do. I started right out of Vanderbilt at a boutique shop at the time. It was called Robinson Humphrey. It’s now a part of Truist Bank. It was SunTrust Robinson Humphrey. So I was in the M&A group there.
[00:20:58] Gary Bisbee, Ph.D.: Do you think your success as an entrepreneur was advantaged by the time you did spend in finance?
[00:21:04] Travis Messina: Absolutely. I’m a bit old-school perhaps in this regard. I kind of think when you’re coming out of college or coming out of an MBA program, the benefits that you can receive by going either into accounting or going into a consulting role, especially investment banking can really put people ahead. So, if you think about it in retrospect, the amount of responsibility you’re given as a junior investment banker and pretty sophisticated transactions is remarkable. So that’s presenting to boards of directors of publicly traded companies, working with the CFOs of those companies, and understanding the critical components that are necessary for a sustainable business. I was able to get that on steroids in a very compressed timeframe, significant amounts of experience. It absolutely was a great precursor to the skills that would be necessary, ultimately at Vanguard Health, where I went after investment banking and then in the founding of Contessa.
[00:21:58] Gary Bisbee, Ph.D.: That was the next question, which is, what did prompt your going to Vanguard from finance?
[00:22:05] Travis Messina: I always tell people that I kind of Forest Gumped to my way to where I am today. So I didn’t have some grand plan to say, well, I’m going to do investment banking, go into industry, and then ultimately start a company. It was just always being completely dedicated to the position at hand. So when I was doing investment banking, as I mentioned, I was in the mergers and acquisitions group. I started as a generalist, worked on a bunch of different industries. Healthcare was one. Ultimately became focused on healthcare. And I remember coming back from a pitch actually to another for-profit acute care operator. It’s ultimately LifePoint now. It was backed by Warburg Pincus at the time. The senior banker looked at me and said, if you were smart, you would go apply this skill set within industry. And I didn’t know if that was because I was a bad banker or he was genuinely looking out for my best interest. But I saw Vanguard Health and I know, a lot of my old boss, Keith.
[00:22:55] Gary Bisbee, Ph.D.: Yeah.
[00:22:56] Travis Messina: A significant portion of the leadership team had backgrounds in M&A or corporate development. So Keith obviously is a transactional expert. Charlie Martin, the chairman and CEO, was at corp dev. Joe Moore, Tim Petriken. There was a lot of folks that had that M&A background. And ultimately I thought, I want to be in healthcare and if there was a team who would value the expertise or the skill set that I have, it would most likely be that team. So there was a natural attraction to Vanguard and thankfully I was able to secure a spot with them on their corp development team.
[00:23:28] Gary Bisbee, Ph.D.: I knew obviously you grew up in healthcare, at least from the standpoint that your father was a surgeon. You spent time in finance, but then when you got to Vanguard, you had a chance to see the business side of healthcare a little bit more completely. What were your first thoughts about healthcare? Anything surprise you about actually working in healthcare at that point, Traivs?
[00:23:54] Travis Messina: There were a number of things. The first thing that surprised me was that how much I genuinely enjoyed being on that team. I said, if Vanguard had continued into existence and hadn’t been acquired by Tenet, I could have worked there the rest of my life. I loved learning from that team. Keith, as my boss, was an amazing person to learn from. But as the person who was tasked with doing, in essence, the underwriting for these acquisitions, I noticed the lack of sustainability with specific respect to the financials of not-for-profit health systems. I would pour over these financials and I would see that they were losing money on the overwhelming majority of admissions. And that was specifically confined to Medicare related businesses, whether that was fee for service or Medicare Advantage. And just thinking to myself, this is not a sustainable business, right? When you notice that not-for-profit health systems typically generate margin on investment income, having a background in capital markets, if that investment income isn’t there, they don’t have profit from operations to drive sustainability. And so that was just a overwhelming eye-opener for me from my time at Vanguard.
[00:25:05] Gary Bisbee, Ph.D.: Yeah, unfortunately, that hasn’t changed much either, has it?
[00:25:09] Travis Messina: know. It hasn’t, it was a major contributor to the founding of Contessa, right? Like obviously there was the element of patients wanting more care into the home, but it was creating the more economic model for acute care operations. That played a big role in my creating the business plan.
[00:25:25] Gary Bisbee, Ph.D.: Well, let’s follow up on that. So what were the circumstances that led you to found Contessa?
[00:25:31] Travis Messina: Much like my budding music career, I didn’t want to be the leader of the band or the booking agent and the manager. It was just kind of, there was a void and felt very strongly about the music at the time. And so I stepped into the role and I would say the exact same thing played out with Contessa. Vanguard sold to Tenet. I had the opportunity to go with Keith to Tenet. It was in Dallas and just personal circumstances precluded me from doing so. And I had the chance to join Charlie Martin at his family office. And I said, Charlie, I’m flattered, but I came to Vanguard to get out of the investment realm and get more experience in operations and, to be candid, Vanguard was working on this hospital level care at home model in our San Antonio market. I think that there’s a need for this in the marketplace. So I appreciate it, but I think I’m going to try and go down this path. And Charlie, as you know, being the entrepreneur that he is, he was like, that’s a great idea. Why don’t you come to my family office, write your business plan. If it’s worth anything, I’ll give you some seed capital, which ultimately was the driving force behind me creating Contessa. So I went to Martin Ventures. I wrote the business plan where the idea, at a very high level was, if the surgery center industry could be successful in a partnership model with health systems for low acuity surgical procedures, can the same be done for low acuity medical admissions? The ultimate challenge that I kept on unveiling was the lack of a viable reimbursement model because hospital at home had been around for decades in pilot or grant like forms, but never had it been reimbursed by a managed care payer. And so ultimately that was the problem that we set out to solve.
[00:27:08] Gary Bisbee, Ph.D.: Well, thinking about you and your founder role what lessons, have you learned over the last seven plus years?
[00:27:14] Travis Messina: First and foremost, team is everything right? And so the old adage, hire people smarter than you and get out of their way. I try and live that every single day. And I definitely punched above my weight. Dr. Montenay was the CMO of one of the largest health systems in America. For him to come on board and lead our clinical team at the outset was absolutely critical and we’ve got key team members in every regard. And so definitely making sure that you have the right personnel is essential to success. Secondly, it never goes as planned. And in fact, it’ll probably cost twice as much, so plan accordingly. And I think having that finance background ultimately proved to be very beneficial to Contessa so that we could achieve our mission. And lastly, I think that, and this is obviously pertinent specifically to healthcare, but again, having that mindset of having everything be rooted in quality and clinical procedures is absolutely essential. If you do that and then you come up with the right reimbursement model, then you can have long-term sustainability. Obviously, if you jeopardize that, then you will not have a viable business model.
[00:28:15] Gary Bisbee, Ph.D.: Great advice for all founders, Travis. Thank you. So Travis, Amedisys acquired Contessa mid last year, basically. What was the rationale from Amedisys’ standpoint to approach Contessa?
[00:28:29] Travis Messina: Absolutely Amedisys’ rationale, and for those of your listeners and viewers that aren’t as familiar, Amedisys is one of the largest home care providers in the country, focusing traditionally on home health and hospice. So I believe they’re the second largest home health and third largest hospice. I apologize, I’m still relatively new to the team, so trying toget my stats correct there. And so the strategy was a couple fold. First and foremost, they wanted to expand the service offering beyond just traditional home health and hospice. And so making sure that you could round out the continuum of services and focus on higher acuity services, would enable them to treat a larger swath of patients and increase their total addressable market. Secondly the chairman and CEO, Paul Kusserow, has a managed care background. He was at Humana for quite a bit of time. Chris Gerard, the President and COO who soon will be the CEO, he’s been in home health and hospice his entire career. They’re noticing this shift from Medicare fee for service to Medicare Advantage and the need to have risk-bearing or risk taking capabilities. And so, as I mentioned, all of Contessa’s managed care contracts are value-based in nature. Having that infrastructure to take on more risk financially, and associated with a traditional home health model, was highly attractive to them. So I’d say that those were two primary components. And then lastly, having team members that took new ideas, formulated a business plan fairly quickly and then have the ability to execute on that plan. They knew that as being a necessary component going forward so that they could continue to innovate at a faster pace.
[00:30:02] Gary Bisbee, Ph.D.: Next question would be then about Contessa. What was your thinking? I’m sure, as you’ve laid out already, the opportunity to scale is important, but what was your thinking at Contessa about this opportunity?
[00:30:14] Travis Messina: You’ve asked a lot of questions about leadership, and I think that this was a particularly trying component as a leader. Naturally as the founder and the team members that have joined Contessa, we didn’t set out to sell the company. Again, having that investment banking background, we hired an investment banking firm to advise us.
And we actually went out to raise capital from a private equity firm and to continue operating autonomously. And as the leader, it’s my job to make sure that I actually have a fiduciary responsibility as a board member to the shareholders to do what’s in the best interest of those shareholders, not what’s in my best interest. And so while I would have loved to continue running the company and being at the helm of it, I knew that what was best for our partners, for our patients, and for our team was to be a part of a scaled organization. And so, I mean, that was a challenging decision to make, but ultimately, if we wanted hospital level care at home to be successful, we needed to be on this national platform. Amedisys is second to none in quality. They’re one of the highest quality home care providers. So again, sticking with that mantra was essential. Secondarily they’re in 40 states. I think they do something like 65,000 visits a day. They have 22,000 caregivers. And seeing the challenges that were presenting themselves in the industry of recruiting high quality nurses to go into the home, being able, again, to tap into that infrastructure and the leadership that knows how to render care in the home at scale and do so in a high quality manner was absolutely essential. So ultimately it came down to, if it was stay it alone or have the highest ability of success with the model, being on a scale platform was essential.
[00:31:49] Gary Bisbee, Ph.D.: Maybe with your financial hat on, it does seem that healthcare has become an industry of large companies. Was that part of your thinking as well?
[00:32:01] Travis Messina: Absolutely. I mean, without a doubt. If you’re thinking about the value proposition to the various constituents, because healthcare is so enormous, you have to be able to address it at scale in order to move the needle. And so let’s take that from a number of different constituents. First, our health system partners. You’ve got national organizations like CommonSpirit and Ascension, $20 plus billion in net revenue. And while hospital at home is still in its formative stages, home care is not. So being able to address more capabilities, I think is important going forward. But primarily from the payer’s perspective, you’ve got organizations like Humana, Cigna, et cetera that have billions of dollars in medical spent. Hospital at home is still in those nascent stages. It’s not moving the needle on their medical expenses, but if we can bring an integrated model, which was the desire of the Amedisys leadership, to their members, offer more services in the home, you can drive more value, not only from an offering perspective, but obviously clearly geographically as well.
[00:33:03] Gary Bisbee, Ph.D.: So just in terms of your role in particular, what role are you playing in the new merged company?
[00:33:10] Travis Messina: So, I was actually pleasantly surprised as someone who has an M&A background, I had an appropriate level of skepticism as to how this would play out. But I’m the President of the Contessa segment. So I still run the Contessa team. I report to the CEO, Paul Kusserow, and we’ll continue reporting to the new CEO, Chris Gerard, when he takes over in April. And they respect the fact that they have not been in this business before. They don’t know how to operate it, but they do know how to operate care in the home. And so bringing all the benefits of the infrastructure that they have to our team has given me more resources, so to speak. So I’ll continue to run the Contessa segment. All of our team is still intact. And we actually went through the budget process already for 2022. And that’s where you typically can see things go awry if you will, but everything was as advertised. And so it’s been a great partnership.
[00:33:55] Gary Bisbee, Ph.D.: Super. Well, we look for good things to happen in the future too. This has been just a terrific interview,.Travis. We appreciate your time. I have one last question, if I could. In the audience, we have younger leaders, kind of up and coming leaders, I would say. What advice would you have for an up and coming leader in healthcare?
[00:34:17] Travis Messina: Absolutely. We could spend a whole hour on Gary, but I’ll try and give you the CliffsNotes. I touched upon the importance of team. Do not be afraid to hire someone that has better credentials or experience than you. My entire team is made up of those that are better than I am in all regards. And so making sure that you have that expertise is important. I don’t run the business. My job is to find the right team members and give them the resources so that they can be successful. So I think having that humility is absolutely essential. Along those lines, acknowledging when you don’t know how to solve a problem and to seek out help is essential. We don’t know the answers to all the problems. And so tapping into various resources, be that your investors, independent advisors, other entrepreneurs, and seasoned executives is really important because we all learned at one point and we continue to learn. So I think having that humility and asking for input is essential. I go to Charlie Martin and Keith Pitts all the time for advice. And so, they’ve been there. They’ve seen a lot of different things. They’ve got a great deal of experience. And so tapping into that wealth of knowledge is important. And then lastly, and this is really important. You have to balance yourself because you could always spend more time perfecting your business, tweaking something. And I have a wife and two girls, and so making time to step away and spend time with them, doing the things that they love with them, I think is extremely critical because, especially in this day and age of burnout, but even without that, it’s important to stay balanced because, ultimately you won’t be able to have the clarity that is necessary to move your business forward if you don’t take a minute to step away from it.
[00:35:58] Gary Bisbee, Ph.D.: Great words of wisdom. Thanks so much, Travis. Appreciate your time today.
[00:36:02] Travis Messina: Gary, I really appreciate the chance to be here.