Kaiser Permanente and healthcare investment firm Town Hall Ventures announced a joint venture, Habitat Health, on Wednesday that will provide integrated home and center-based healthcare services to low-income older adults across the country.
Habitat Health will provide services through the Program of All-Inclusive Care for the Elderly, a Medicare and Medicaid-funded care model. Executives from both organizations would not disclose financial details of the for-profit company, which will open its first two PACE programs in Los Angeles and Sacramento, California, in 2025.
Related: PACE gains speed as states seek nursing home alternative
The company will leverage its ties with Oakland, California-based Kaiser Permanente to enroll participants in PACE and provide healthcare services. Habitat Health plans to replicate that model with other health systems as it expands nationally, according to Dr. Bechara Choucair, chief health officer for Kaiser Permanente.
“Finding the right relationships between Habitat Health and the right health systems and organizations on the ground will be critical to create that smooth engagement and the deep connections to the communities where those folks live,” Choucair said.
The joint venture comes at a time when the 34-year-old PACE program is expanding in several states due to an aging population, nursing home closures and increased state funding for home-and community-based services.
Approximately 72,000 older adults are enrolled in 163 PACE programs in 32 states. The model provides home care, prescriptions, meals and transportation for participants. They can also socialize and receive a variety of medical services at PACE centers.
Most participants are dually eligible for Medicare and Medicaid and pay nothing for the services. Some Medicare-only enrollees pay a premium to cover the long-term care and prescription drug portions of the program. PACE providers receive capitated payments — a predictable, upfront, set amount of money — from Medicare and Medicaid to cover each participant.
As an integrated provider of healthcare services and an insurer with plans covering 12.5 million enrollees across eight states, Kaiser Permanente could change the game for PACE, according to Andy Slavitt, a general partner at Town Hall Ventures and a former acting administrator at the Centers for Medicare and Medicaid Services.
Slavitt said Kaiser Permanente's strong relationships with patients and strong brand recognition will help Habitat Health more easily enroll participants in PACE and spend less money on marketing costs than other PACE operators.
“We believe that premiums for the PACE program should go for medical care, personal care, home care and keep people healthy,” Slavitt said. “We think we can do this without having to spend a significant portion of premiums on marketing.”
Habitat Health’s model of partnering with certain hospitals as it expands could help them better control patient costs and remain profitable, according to Keith Knapp, associate professor of health management and policy at the University of Kentucky College of Public Health.
“It could be huge because hospitals have a lot more skin in the game than they used to in trying to prevent readmissions within 30 days,” Knapp said. “Any tools they have in their tool chest to help someone be successful after discharge is really beneficial to them.”
A number of health systems, including Geisinger, Baptist Health and Ascension already operate PACE programs in Pennsylvania, Arkansas and Michigan, respectively.
