The potential for advance care planning to generate cost savings by reducing expensive, high-acuity care is drawing the eyes of inventors to the companies that facilitate such services. This, coupled with increasing usage, is contributing to a capital increase in this emerging healthcare sector.
As Medicare expenses rise more and more, stakeholders across the healthcare space are trying to demonstrate value by reducing costs, primarily by avoiding hospitalizations, readmissions, and emergency room visits.
Advance care planning has shown promise in achieving these goals. These services have been associated with a higher likelihood of hospice enrollment and a lower incidence of intensive care, even during hospital stays, according to a 2019 JAMA Network study.
This potential has sparked increased interest among consumers who increasingly prefer to receive care in their homes, as well as investors seeking to take advantage of a growing market for advanced care planning services.
“Providing unwanted or misdirected health care is one of the most expensive aspects of our health care system, providing care that patients basically don’t want,” said Desh Mohan, MD, medical director of Houston-based advanced care planning developer. of the Koda Health platform. “The current standard of care is broken. It’s this perfect storm of regulatory and financial changes, personal involvement, and a financial tipping point. This is something we have to solve. “
As the healthcare community grapples with these conundrums, the financial sector is taking notice of companies working to find solutions.
Koda Health secured $ 3.5 million in growth capital last month, with Ecliptic Capital leading the investment. The influx of dollars will support the company’s goal of expanding its platform across all 50 states, according to CEO and co-founder Tatiana Fofanova.
Other supporters of the round included Sigmas Capital, CRCM Ventures, Headwater Ventures, and a number of angelic investors.
“Because there are differences in regulations and requirements between each state, we have so far pursued opportunities in select markets,” Fofanova told Hospice News. “This really makes sense rather than proactively developing the ability to be implemented in every state. With this new capital injection, we will effectively create the content and platform to be legally compliant in every single state, regardless of market opportunities. “
Koda is not alone in attracting investor interest.
Vynca, headquartered in Palo Alto, California, raised $ 30 million in new growth capital in January, reaching a total of nearly $ 37.7 million since its inception in 2013. This investment was led by This Capital with the participation of existing investors including Generator Ventures, First Trust Capital Partner, 4100 Group and OCA Ventures.
Vynca experienced record growth in 2020, having generated more than 1.16 million end-of-life planning documents that year, a 64% increase over the previous 12 months.
“Most Americans prefer comfort-focused care in the face of serious, life-limiting illness. With COVID-19, the risk of requiring life support dramatically increases with age and chronic illness, “Ryan Van Wert, MD, co-founder and CEO of Vynca, told Hospice News earlier. of early care, these individuals are extremely vulnerable to being placed on a ventilator. All this denies the individual the right to choose the care he desires and absorbs an increasingly precious resource. “
The pandemic has indeed played a role in the growing interest in advance care planning. The nearly 1 million deaths – in which communities of color are disproportionately represented – have led many families to start considering their own end-of-life wishes.
Research from the JAMA Network found “substantial increases” in advance care planning usage between February and March 2020. The average monthly number of advance care planning users rose to 154 between January 2019 and April 2020. Before of the pandemic, that number was 31 per month.
Historically, communities experiencing wide-ranging health disparities, mainly African Americans and Hispanics, have been less likely to have completed early care plans, although recently some indications have pointed to possible improvement.
Not surprisingly, these communities are also among those most affected by COVID.
To address these inequalities, advanced care planning tools and processes must be versatile enough to remain accessible to patients from a wide range of cultural backgrounds. This was a priority for Koda as they developed their platform.
“We know that from the patient’s point of view, different patients will approach advanced care planning differently, depending on your age, your disease states, your cultural background,” said Mohan. “It is important that these delicate conversations are guided in a personalized way towards you.”
While the signs point to positive trends in the use and effectiveness of early care planning, the devil is always in the details.
In order to maximize benefits, healthcare professionals must be methodical in designing and executing their advance care planning processes.
Conversations about care goals need to be addressed in an understandable and accessible way for patients who may have varying degrees of health literacy.
Advance care planning documents also need to be readily accessible when needed, as patients, families and physicians may not know or be unable to communicate the information they contain.
“Most of the value of advanced care planning lies in aligning the patient, their preferences and needs with their surrogate decision maker,” Fofanova said. “After all, these are not legally binding documents. They are protective against liability, but if the surrogate gets the hospital and they’ve never seen that advanced directive, they don’t need to follow it. “