Current Shares Out5.0
Post Offering Valuation7.0
Post Offering Shares Out
Overview and HistoryEDIT
Hospitalization for patients is stressful, and discharges can be even more so. Patients which have complex health histories, and at times, chronic conditions, can be left to fend for themselves in the recovery process, and are likely to end back up in the emergency room.
In 2010 one in eight Medicare patients were readmitted to the hospital within 30 days of being released after surgery, while patients in the hospital for reasons other than surgery returned at a rate of one in six. The cost burden of readmission on the healthcare system is significant. Hospitals spent $41.3 billion between January and November 2011 to treat patients readmitted within 30 days of discharge. Research has shown that hospitals can engage in several activities to reduce the rate of readmission.
As a consequence, the U.S. healthcare system is in the midst of a massive transformation to improve patient care and reduce costs.
Also in 2010, the Affordable Care Act required HHS (Department of Health and Human Services) to establish a hospital readmission reduction program (HRRP). Effective October 1, 2012, the program was designed to provide incentives for hospitals to implement strategies to reduce the number of costly and unnecessary hospital readmissions. The program was a catalyst to creating the Transitional Care market.
The challenge for traditional inpatient healthcare facilities is that they are not built for transitional care. The opportunity that our Company was formed to address is to offer a third party solution designed to give the newly discharged patient and their healthcare team continuity of medical and post discharge care, further reducing adverse events, unnecessary return visits. We take patients from any inpatient facility, including hospitals, skilled nursing facilities and rehabilitation centers.
Global Transitional Healthcare (GTC) is the nation’s first Medicare-approved, third-party transitional care provider. Our mission is to enhance the care continuum and provide personalized clinical oversight for each individual patient who will recover more effectively in a home setting.
Our transitional care platform helps avoid complications and readmission to the hospital by helping to manage all aspects of care from inpatient stay to home for 30 days from date of discharge. Through a
transitional care provider team, patients and their families will have access to a healthcare provider that is familiar to them and their case, 24 hours a day, 7 days a week.
Our strategy is to be a partner to inpatient healthcare centers and facilities, where physicians and operators refer moderate-to high-risk discharged patients to our transitional care platform to assist patient post-discharge needs and coordinate at-home care for 30-days after discharge. We are currently partnering with more than 15 medical groups, physicians and inpatient facilities in Southern California.
How GTC Works
Each patient is assigned a nurse practitioner and a registered nurse, who will make contact with the patient in the hospital. Within a day or two, the nurse practitioner conducts and at- home assessment soon after discharge. For the next month, the patient has 24/7 access to the GTC care team.
This includes both phone and face-to-face visits between the patient and their nurse. In addition to clinical oversight, we provide an extensive level of care, coordination, medication reconciliation and disease management education. Our nurses help patients manage their medications and at-home care routines, coordinate follow-up visits with physicians and educate the patients’ family members about continued self-care.
We develop and customize a transitional care plan based on the needs of the patient, whether that means home visits every few days or just follow-up phone calls.
Products and ServicesEDIT
We have developed a cloud-based, proprietary and HIPPA compliant platform to coordinate, manage and track patient care transitions from hospitals to post-acute care settings. Our professionals are able to communicate with patients and providers based on the users’ preferred method of communication.
In 2012, the Centers for Medical Services (CMS) started the Hospital Readmission Reduction Program (HRRP) with the goal to improve healthcare. On October 1, 2014, the final payment and policy changes for hospital readmissions for CMS went live, creating financial pressure on hospitals across the United States to mitigate readmissions to avoid increased penalties.
CMS applies penalties to the base diagnosis related group (DRG) payment. Hospitals have to track the following 30-day readmission rates: heart attack (AMI), heart failure, pneumonia, COPD, THA/TKA (knee or hip arthroplasty).
In January, the Health and Human Services announced goals of tying 85% of all traditional Medicare payments to quality or value by 2016 and 90% by 2018 through programs such as Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.
Recent studies have shown that health care facility managers could expect to save $2,140 for the average 30-day readmission avoided. For heart attack, heart failure and pneumonia patients, expected readmission cost estimates were $3,342, $2,488 and $2,278, respectively. By contrast, the average Medicare reimbursement for 30 days of transitional care is $230.
The savings potential of GTC’s transitional care platform to Medicare is more significant, where it pays for admission costs (average $9,600) where the presence of a transitional care team can often prevent a situation where a discharged patient might be readmitted for a non-DRG condition such as renal failure. In such a case, at a $230 transitional care reimbursement, Medicare savings on readmission are 97%.
There are many health care providers that offer some level of transitional care services and other types of health care. Current market-based approaches include:
• Partnering with community physician and physician
• Partnering with local hospitals groups
• Having nurses responsible for medication
• Arranging for follow-up visits before discharge reconciliation
• Sending discharge summaries to primary care
• Assigning staff to follow-up on test results after physician discharge
However, conventional healthcare facilities are not built for supporting discharged patients. They do not have the infrastructure and processes in place, and the Medicare reimbursement rates available do not justify the investment in time and resources they would need to make to become proficient in a transitional care model.
In the current environment, when their patients walk out the door, they have no more control over the patient, yet they are penalized for what is supposed to happen when the outpatient doesn’t end up doing, which causes the readmission. They are penalized for readmissions of patients under DRG categories which, too frequently occur due to patient behavior and lack of a functional transitional care program.
Global Transitional Care is the first Medicare-approved company to focus exclusively on this type of service. Unlike conventional healthcare facilities, Global Transitional Care is structured to perform Transitional Care services, and to do so profitability under the existing Medicare reimbursement scheme6. We serve as an extension of the healthcare facility, giving it a level of control outside of the hospital, and at no cost to the hospital (see “Performance Share” below).
Based on our plan to rollout the GTC platform to California, Texas and Florida, initially, we estimate that the initial addressable market opportunity for our services is approximately $142 million.
Our Solution & Value PropositionEDIT
Key to our success in establishing and maintaining our leadership in transitional care is our ability to build trusted relationships with physicians as well as strategic healthcare channels including hospitals, skilled nursing facilities, rehabilitation facilities and in demonstrating our value proposition:
Best-in-class transitional care platform;
Designed to reduce readmission rates and facility costs;
Low-cost infrastructure capable of scaling to meet demand.
We assign a business development officer to establish a relationship with inpatient facilities, physicians and key influencers throughout the healthcare value chain to understand the important of follow-up care in home to discharged patients, and crucially, the value proposition of transitional care. This is a highly specialized process that requires an “early education” approach.
After we receive “buy-in” from the inpatient facility, we assign a “provider relations” specialist, which
continues with the education, servicing and account maintenance. We assign a dedicated Transitional
Care Team comprised of a specially trained nurse practitioner and registered nurse to the inpatient facility.
When patients falling under a DRG code are scheduled for discharge, the inpatient facility notifies our
team (using our automated, cloud-based application), which initiates our transitional care process.
Our “sales”, or more accurately, business development team members are paid on a performance basis,
based on accounts being maintained and revenues generated per account.
In addition, because patients can self-refer to us, many of our patients come to us directly or through
their advocate or caregiver.
In each initial territory, we establish a relationship with staffing agencies which provide our pool of
registered nurses and nurse practitioners to serve patient accounts. We offer mileage reimbursement and
we pay registered nurses $40/hour and nurse practitioners $50/hour. In addition to enabling us to easily
scale, outsourcing our nursing resources reduces human resources and admin costs, overtime fees as well
as insurance fees.
Nurse practitioners can provide 30-35 face-to-face visits (1x) per week, while registered nurses can provide 30-50 phone interactions per week.
As the first and only exclusive post-acute transitional care provider in the country to have received an NPI and approval for Medicare direct bill, we committed to positioning Global Transitional Care as a thought- leader and innovator in the Transitional Care market. We have been invited to Washington DC to meet with key government officials on the Ways & Means Committee to discuss our business and vision for serving the Transitional Care market.
Our developing partnership with MD Anderson and pending clinical study could set the standard for a framework pathway for transition for cancer patients from inpatient to outpatient.
In addition, we are in discussion with a major academic center in California to deploy services for their patients, which is an opportunity to work with a leader in healthcare academia.