Cardinal Health CEO Bullish On At-Home Care, Value-Based Payments
By Jof Enriquez,
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Cardinal Health is well-positioned to compete and leverage its growing post-acute services and cardiac portfolio as the healthcare environment in the United States adopts valued-based payment models, according to its chief executive.
Speaking to analysts during the company's first quarter earnings call, George Barrett, chairman and CEO, Cardinal Health touted increased market penetration of the company’s Cardinal Health At Home brand, the closing of the deal to acquire Cordis — to give Cardinal Health a foothold in the cardiovascular solutions market for aging populations — and the purchase of NaviHealth, a provider of population management solutions, as responsible for putting Cardinal Health in a strong position to compete.
"The modernization of our portfolio is particularly relevant as we see a system in which payment models continue to evolve. Now, more than ever, it's critical that we have the ability to get patients the right care, at the right time, and in the right setting. That's why in August, we took a majority stake in NaviHealth, a Nashville-based market leader in post-acute management for payers, health systems, and providers," Barrett said in the call, according to The Street.
Health plans, health systems, and physicians are increasingly focused on post-acute care, where costs are projected to surpass $200 billion per year, and escalate by six percent per year, according to a NaviHealth press release. An increasing number of providers and health plans now participate in value-based payment models, including bundled payments initiatives.
According to the call transcript, Barrett said that Cardinal Health's expanding scale and reach puts the company in a unique position to compete in the U.S. healthcare environment that is leaning towards cost-effective, high-quality care through value-based payments. He cites proposed mandatory post-acute bundling for hips and knees and Medicare changes to the discharge process as evidence for this shift.
In the call, Barrett reiterates Cardinal Health's strategy in maximizing opportunities, saying, "Combining Cardinal Health At Home's patient reach, our broad pharmacy capabilities, and NaviHealth's predictive analytics at discharge positions us well to advance our value proposition of right care, right time, right setting, and makes us a partner of choice for hospitals and health systems in the emerging value-based payment models."
Cardinal Health launched the over-the-counter Hospital Quality at Home brand this past quarter. The line is targeted at caregivers attending to patients post-discharge, and includes products such as Advanced Wound Care, First Aid, Personal Care and Home Healthcare, according to Zacks.
Barrett's optimism is reflected in the company's latest numbers, as growth in Cardinal Health brand products and the Cardinal Health At Home business lifted the company's Medical business by 2 percent to $2.9 billion, according to RTT News. Revenue for the quarter climbed 17 percent to $28.1 billion, from $24.1 billion in the previous year. Profit for the first quarter increased 44 percent compared to the same period last year, beating expectations. Net earnings rose from $266 million to $383 million year-over-year, boosted by strong performance from both the Medical and Pharma segments.