Helping health insurers manage home-health benefits and control costs has been good business for Hartford-based CareCentrix.
The company, which oversees networks of homecare service and equipment providers on behalf of insurers like Cigna, crossed the $1 billion revenue mark for the first time in 2015, and grew to a record $1.4 billion last year, CEO John Driscoll said in a recent interview at the company's Stilts Building headquarters.
That puts CareCentrix, which is profitable but won't disclose exact numbers, in what's likely to be a small group of privately-held Hartford companies in the billion-dollar club.
The state has helped private-equity-backed CareCentrix along the way, promising it as much as $24 million in grants in 2012 as part of Gov. Dannel Malloy's First Five program. In exchange, the company agreed to keep its headquarters in Connecticut until 2023, retain 213 jobs in the state and create another 290 jobs by the end of 2017.
As of Feb. 28, CareCentrix was five positions shy of that goal, with 10 months to go, Driscoll said.
"We'll exceed that target," he said.
Driscoll said the concentration of health insurers and providers in Greater Hartford and surrounding the company's Stamford office has made for easy recruitment.
"We want to build where we can find the talent," Driscoll said. "There's a lot of talent in Greater Hartford."
Hired in 2013 after executive roles at healthcare technology maker Castlight Health and pharmacy benefits manager Medco, Driscoll said CareCentrix's aggressive revenue growth over the past few years has been organic and spread among new and existing customers.
Home care is a growing sector, with total industry spending — both government and commercial — reaching nearly $89 billion in 2015, according to the Centers for Medicare and Medicaid Services.
Insurers, Driscoll said, hire CareCentrix because they want to control homecare costs and improve care delivery.
The 20-year-old company builds and manages a network of approximately 8,000 homecare providers and vendors of durable medical equipment (a $48.5 billion industry), such as wheelchairs, insulin pumps and crutches. It negotiates contracts with providers, pays their claims, and handles customer-service inquiries.
CareCentrix's business proposition is that a patient's home can be both a cheaper and more preferable setting to deliver certain healthcare services, including drug-infusion therapy and sleep studies, two CareCentrix niches.
The homecare industry has long embraced that premise, but for an insurer, coordinating those benefits and patients requires expertise and manpower. Rather than keeping them in house, some insurers farm out those functions to CareCentrix.
"If we aren't providing a better price and service, [insurers] won't pay attention," Driscoll said. "We in many cases sit in the shoes of the health plan. Then, once we are managing, we try to enhance the experience of what happens to patients when they leave the hospital."
The company has developed a variety of technology to help it do that, including software for care coordination, provider ordering and remote patient monitoring.
Insurers could handle home care in-house, and some do, but those that hire CareCentrix or one of its competitors — which include California-based Apria and South Carolina-based eviCore — have calculated that it would be more costly or difficult to build capacity internally.
"It's just a huge undertaking," said Dr. Jeffrey Hankoff, medical officer at Cigna, which is CareCentrix's oldest customer. "You'd have to have a presence in every market. At this point, this just makes sense for us."
CareCentrix's other clients include Aetna, Blue Cross Blue Shield of Florida and Horizon Blue Cross Blue Shield of New Jersey.
Each contract CareCentrix negotiates is different. Some have flat fees while others pay CareCentrix a percentage of the money it saves, Driscoll said. CareCentrix claims it oversees about 23 million covered lives.
Of that number, just under 370,000 are in Connecticut, as of October, according to CareCentrix. That includes Medicare Advantage customers. But home care is not just for older patients. Connecticut employees may encounter CareCentrix after a surgery or when recovering from an injury.
Contracting directly with large employers could be a potential growth area for CareCentrix. Driscoll said large, self-insured employers are showing an increasing interest.
"There's certainly a lot of activity," he said. "Whether it turns into something, I don't know."
While there is much uncertainty over what Congress and President Donald Trump might do to Obamacare, Driscoll doesn't seem concerned about any major impact on his company.
"From a sector perspective, [Obamacare] felt kind of neutral," he said.
However, he hopes that Trump's Department of Health and Human Services Secretary, Tom Price, a politician and physician, will continue HHS' encouragement of payment and care innovation, which could benefit CareCentrix.
Cigna's Hankoff predicts the growing homecare industry will become increasingly important for insurers.
"As long as quality is kept at the same level, we think it's the way to go," he said.