Amedisys Could Bolster Hospice Staff Via connectRN Investment

Last month, connectRN announced it had raised $76 million, with the Series F round, led by Suvretta Capital Management and Avidity Partners, with other investors including Amedisys Inc. (Nasdaq: AMED).

Amedisys did not disclose the size of its investment in connectRN, which has now raised more than $95 million since its 2014 founding. Along with the financial support, the Baton Rouge, La.-based provider plans to leverage the staffing startup to boost its home health segment – and potentially its hospice business down the road.

“By doing this, we can help companies emerge faster and give them a better perspective,” Amedisys Chairman and CEO Paul Kusserow told Hospice News. “You can learn a lot. And together, we can develop a much-needed product.”

Amedisys currently delivers home health, hospice and personal care services across 529 locations. It additionally offers higher-acuity care services in the home through Contessa Health.

On its end, the Waltham, Mass.-based connectRN helps nurses and aides find work across health care settings. Its services include flexible-shift scheduling, career-development resources and more.

The startup has seen ample demand for its services of late, with its business expected to deliver year-over-year organic revenue growth of about 240% in 2021, according to the company.

“Nursing is the backbone of the health care system, and nurses and aides deserve a responsive community that empowers them to access supportive resources, provides greater flexibility to pursue new work opportunities and allows more control over their careers,” connectRN COO Maddie Thoms said in a press release.

Amedisys will initially begin using connectRN as part of a pilot program housed within its home health segment.

Early on, it plans to use the staffing platform to find available clinicians in areas where it’s typically difficult to find them. Eventually, though, the goal will be to use connectRN to better engage Amedisys’ PRN workforce, Senior Vice President of Finance Nick Muscato told Hospice News.

“We have 3,000 PRN on staff today, but a ton of them have not done a visit for us in the last three or four weeks,” Muscato said. “If we’re able to get capacity out of that group, that takes a lot of pressure off of the recruiting function by increasing what we’re able to do with the current staff.”

If all goes well, Amedisys will consider a larger rollout.

“We are currently piloting connectRN with our home health care centers,” Muscato added. “If the pilot goes well, we’d like to expand it to our entire home health team – and then pilot this in hospice as well.”

The investment comes at a time when Amedisys is seeing the cost of doing business rise due to increased utilization of contracted nursing staff. The company has been supplementing its ranks with contractors, often due to the need for some full-time employees to quarantine during the pandemic, the company’s COO, Chris Gerard, said during a third quarter earnings call. 

About 4% of the company’s business was performed by contractors during Q3, contributing to a $7.14 increase in cost-per-day for its hospice segment.

Those who follow Amedisys shouldn’t be surprised if it announces similar investments in the future. At any given time, the company has a list of about 250 non-core businesses it monitors.

“Obviously, all of those are in different stages of their lifecycle,” Muscato said. “We’re not necessarily tracking all of them from a pure investment perspective, but maybe from a potential business-relationship perspective as well.”

Medalogix is an example of another Amedisys investment.

Amedisys invested in Medalogix back in 2018, with other home health providers later joining in as well. Among its tools, Medalogix helps providers identify when a patient may be better suited for hospice care.

The Vistria Group announced a recapitalization and a growth investment in Medalogix in May. At the time, Medalogix joined forces with Muse Healthcare.

Supporting post-acute care innovation is a core strategy for Amedisys, Kusserow explained.

“We need to be constantly innovating, partnering and searching for tools that can [strengthen] our workforce,” he said. “We started to look at, and research, how we were going to come out ahead. We’ve been at this – the workforce challenge – long before COVID.”