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In today’s episode I’m excited to be joined by my friend, healthcare entrepreneur and myNEXUS CEO, McArthur VanOsdale. McArthur VanOsdale started myNEXUS, a technology driven care and benefit management service that enables individuals to live healthier lives in their home. Their mission is to be the leader in health resource optimization. myNEXUS has seen tremendous growth and McArthur has a keen eye for spotting needs in the market and filling those gaps with private sector solutions.
Bill Frist: Welcome to A Second Opinion podcast, where we are rethinking American health. I’m your host, Senator Bill Frist. To make sense of all the dynamic perspectives in healthcare you need a trusted source engaging at the intersection of policy, medicine and innovation. You need A Second Opinion, a podcast where it all comes together.
Bill Frist: In today’s episode I’m excited to be joined by my friend, healthcare entrepreneur and myNEXUS CEO, McArthur VanOsdale. But before we get started I want to thank our sponsors. A Second Opinion is powered by Tivity Health, lifestyle brands that transform healthy living for adults through nutrition, fitness and social connections.
Bill Frist: We’re also brought to you by Change Healthcare, leading the healthcare transformation with one in three patient records touched by their clinical connectivity solution. For more information visit changehealthcare.com/asecondopinion.
Bill Frist: And thanks to Jarrard Phillips Cate & Hancock, the preeminent trusted strategic communications firm devote to healthcare providers. Now let’s turn to the episode.
Bill Frist: McArthur VanOsdale started myNEXUS, a technology driven care and benefit management service that enables individuals to live healthier lives in their home. Their mission is to be the leader in health resource optimization. myNEXUS has seen tremendous growth and McArthur has a keen eye for spotting needs in the market and filling those gaps with private sector solutions. And now please join me and our guest for A Second Opinion.
Bill Frist: McArthur VanOsdale, one of Nashville’s, and I’d say the state and the south’s great entrepreneurs.
McArthur VanOsdale: Thank you very much.
Bill Frist: So welcome to our conversation today. Let’s start when you and I… It wasn’t the first time we met, but the first time we had a conversation in my office not too far from here, and you came by and you said, “I’ve got a vision,” and it was really just that. It was a vision, and that was about five years ago.
Bill Frist: Walk me through it as we walk through this evolution of one of the great companies today that is perfectly situated as we move much more from hospitals and transplant centers where I operated much more to the home. We all know that the future of the hospital is the home, but it takes a lot of management around it. So start that story of myNEXUS.
McArthur VanOsdale: Yeah. I had had a lot of experience, entrepreneurial experience on the payer side as well as on the provider side of healthcare, and I certainly had a vision that more and more could be done and accomplished within the home environment and through effectively managing post-acute care, and home care specifically.
McArthur VanOsdale: I thought there was a huge void in the space, specifically within the insurance and Medicare Advantage world, where payers traditionally have not focused a lot of energy, effort in resources on the home and on post-acute.
McArthur VanOsdale: So that was really kind of my vision at the time. I didn’t think that there was anybody in the space that was doing what kind of my vision was, and as I talked to more payers and providers it became very clear to me that there was a huge void. There was a huge opportunity.
McArthur VanOsdale: As I began to talk to the investor community about this opportunity my vision was certainly validated very quickly and I was able to secure capital and secure initial customers to get the business launched at the end of 2014.
Bill Frist: So 2014-2015, through there, we had a lot of home care, a lot of home healthcare companies, lots of mom and pop organizations. It was really before the emergence of larger home healthcare companies, which are still quite regional. But what did you see? Was it a disjointed, fragmented cottage industry or was it more the lack of the payer controls or management of the fact that there wasn’t one central organizing force?
McArthur VanOsdale: Both. I definitely saw both. My previous business was one of the nation’s largest post-acute in home care provider, assets across 15 states at the time. I sold that business in 2013 prior to myNEXUS, and while there has been consolidation during that timeframe, ’13, ’14, ’15, ’16, in some larger providers out there, there are still a tremendous amount of smaller fragmented, you know, to your point cottage industry type providers going on.
McArthur VanOsdale: Some states are a little different than others, depending on certificate of need and so forth. Even for a large home care provider that maybe has 200 or 300 different locations, you still have 200 or 300 individual branch offices with individual leaders kind of doing things their own way.
McArthur VanOsdale: So I saw this huge opportunity to be this kind of centralizing force to standardize these episodes of post-acute care and home care get greater value out of the episodes of care and ultimately lead to higher quality outcomes. So I saw that on the provider side, and then on the payer side again what I would tell you for a traditional Medicare Advantage plan, this represents call it 4 to 5% of their total medical expenses.
Bill Frist: Right. Quite small. Important, but small.
McArthur VanOsdale: Important, but small. But when you extrapolate that out across an MA plan that maybe has a half a million or a million lives, the numbers start to get pretty large, right? What I saw was these payers that were spending this money for these post-acute and home care benefits, but they didn’t really know what they were getting for it in terms of their return, in terms of the value, in terms of lowering hospitalizations and re-hospitalizations.
McArthur VanOsdale: So I really saw both aspects, because again I had been on the provider side, the healthcare side, and had also worked on the payer side as well.
Bill Frist: So it appears to me that a lot of lack of discipline, a lack of measurements and metrics, a lot of activity, a lot of wins behind the field, because home healthcare and delivery of health at home, as we all know, is going to increase… It’s the most cost effective place.
Bill Frist: So tell me exactly what you do, or give an example of what you do. What does myNEXUS actually do, and feel free to take something from the past or something current to explain.
McArthur VanOsdale: Yeah. So myNEXUS, we’re a technology enabled service platform. We receive patients that are in need of post-acute care and home care through our technology platform. Most of the time those patients are coming out of a hospital setting, but not all the time. Sometimes they’re coming out of some other type of facility, or sometimes they’re coming directly from a community physician, but primarily coming out of a hospital setting.
McArthur VanOsdale: Those patients are getting referred into our tech platform based on the clinical criteria around that patient. It flushes through a set of algorithms and proprietary algorithms that we’ve developed over the course of time that identifies what that patient needs across their episode of post-acute care.
McArthur VanOsdale: myNEXUS has a delivery network of post-acute providers across the country that deliver care according to those care protocols and clinical guidelines and ultimately result in a high quality outcome for that post-acute episode in a very efficient manner from a cost perspective, so that’s managed through our technology platform.
McArthur VanOsdale: For what I would consider an outlier type patient that requires a higher level of post-acute episode or clinical care, we have a team of clinicians and physicians and therapists and wound care nurses that help manage those higher acute type population patients.
Bill Frist: Then how… Again, it’s four and a half years. I introduced you as one of the really great entrepreneurs of the region because of the growth. How big are you now either in your region, states or numbers, and how do you explain that rapid growth.
Bill Frist: Obviously you’re the best and highest quality and the most highest value and all, but break that down a little bit deeper. How big are you?
McArthur VanOsdale: We are eclipsing a million members under management today. That number is going to grow significantly, potentially double as we go through 2019, based on who we’re implementing today. Again, our customers are typically large Medicare Advantage plans and we focused on kind of what we consider the big five plans. So people like Humana, people like Anthem, people like UnitedHealthcare has really been our focus point because they have the lion’s share of the membership in most states.
McArthur VanOsdale: So that’s really who we’ve focused on and how we’ve scaled the business very rapidly. We typically add hundreds of thousands of members at a given time into the program.
McArthur VanOsdale: But in terms of growing at this rapid of a pace, I would say it’s attributable one, to building out an industry leading team that I have assembled at myNEXUS, people that either come out of the payer world, out of the provider world, or out of the technology world, so they have a really good cross-section of knowledge base and have proven very effective of communicating our value back into these payers.
McArthur VanOsdale: So I would say number one the team, and number two the tech platform. We’ve made very significant and proactive and thoughtful investments into our tech platform over the last four years, and we’ve always done so well in advance of the growth, in advance of the new chunks of business coming online, which has enabled us to become very successful around our scalability plans, our compliance plans, which are very near and dear to our heart. I think those two things, the team and the tech platform, together have allowed us to grow with this rapid of a pace.
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Bill Frist: I’ve had the opportunity to be in the room with you with both business people, your team, and customers, and you have a very unique culture, a very unique style as a leader. I’ve watched how it affects the room and I know it reflects really myNEXUS throughout, but how would you describe that, because it’s different. I’m not sure you realize how different it is, but it does set that culture which clearly plays a large role in your success.
McArthur VanOsdale: Yeah. And I would say that that’s probably evolved over the last 10 years of my business career as a business leader of a couple different organizations now. I think that are times in your life where you want to be the person that’s standing up in the boardroom and doing all the talking and making every single decision on your own and not allowing your team to step up and shine.
McArthur VanOsdale: I’ve taken a completely different approach at this point and really focused on assembling the right team, assembling a very well-rounded team, and then empowering that team to be leaders, to demonstrate value, to communicate value both to customers, to investors, and then down throughout the organization.
McArthur VanOsdale: I’m not the one that’s always standing up in front of all of our team members and doing all the talking. I really like to empower my senior team to be successful and I’m pretty proud of that transition. I don’t think everybody can say comfortably from an ego perspective that I was capable of making that transition, but that’s certainly something that I think that I’ve been fortunate around the last 10 years.
Bill Frist: I think it’s so good to hear you say that, first of all the growth process itself, because a great entrepreneur to become a great manager and build a great company oftentimes has to pass that baton because they’re just different skillsets. But clearly that growth process is something that you’ve been aware of and sensitive to, and it’s fun from outside looking in to see how it gets pushed down through the company and looking at myNEXUS in the region the respect that you have. I know that that plays a big role.
Bill Frist: Looking to the future, I mentioned a little bit in passing that… You know, I said it a little bit facetiously, but the hospital of the future is the home. Whether it’s through telemedicine or virtual health, the reach is going to allow people to move much more towards the home as that centricity, that sort of focus of healthcare.
Bill Frist: As you look to the future… Again, we’re going to look into this crystal ball. Are there any big trends or big challenges, and you can answer in terms of myNEXUS as you’re going to build it out, or more generically in the field of home healthcare. But as we’re talking and we have people listening to us and somebody like you on the frontline, I know they’re interested in where we are today looking forward what is to come?
McArthur VanOsdale: Yeah. I’ve had a saying the last two or three years as our company has continued to grow and scale and I really truly believe it, even though I probably sounded a little hokey a couple years ago, but I used to say we’re going to get home care for more Americans.
McArthur VanOsdale: And looking back on my career and having worked for a lot of hospitals, for profit, not for profit hospitals, having worked in the payer community for all these large payers over the years and kind of seen how the healthcare system has been set up over the last several decades, I have a fundamental belief that more episodes can be delivered in a home environment and outside of a facility based setting.
McArthur VanOsdale: You just have to know how to do it in a very effective manner, which is really what our technology and our care guidelines are proving out over time. The more episodes that flow through our technology and our care guidelines, they only get stronger and stronger and more data rich, so I firmly believe that.
McArthur VanOsdale: What I would tell you is our space in general, the post-acute space, the home care space, has become a very popular space from an investor perspective. I think you saw several of the kind of traditional benefit management companies over the last couple of years wanting to get into post-acute, wanting to get into home care management, so that’s number one.
McArthur VanOsdale: Number two, there were a number of transactions in and around our space over the last 12 to 18 months where you saw a lot of the world’s largest private equity investors showing a tremendous amount of interest in investing into this space. So I think the investment thesis over the next 10, 20, 30 years is that home care is a great space. It’s going to continue to grow.
McArthur VanOsdale: Again, we’ve been primarily focused on Medicare Advantage, but there is the Medicare traditional program as well, where I fundamentally believe that we can create a tremendous amount of value as well.
McArthur VanOsdale: So I think the longterm tailwinds on this space are extremely positive, which again is being demonstrated by the strategic interest in this space as well as the private equity interest in this space, and I am the most bullish on it.
Bill Frist: Yeah. The patient, the person sitting at home or maybe a hospital who’s has some either a tragic circumstance happen maybe economically that they don’t know exactly how they’re going to pay for things, who at some point may have to sacrificing in buying food or clothes or something else because of these costs of healthcare, what does myNEXUS mean to them? Does it play a role in making that circumstance of the individual patient’s life better, move towards greater health or more wellbeing?
McArthur VanOsdale: Yes. I can tell you from first-hand experience it can be unbelievably confusing and scary for an actual patient that is going through a discharge process from a hospital and maybe they have a stable home environment, to your point, maybe they don’t.
McArthur VanOsdale: Oftentimes when they are getting discharged into a post-acute setting and this kind of provider is doing these kinds of services and then this other provider is doing these kinds of services, and you have multiple different clinicians coming in and out of your house every day, it can be unbelievably confusing and scary for that patient.
McArthur VanOsdale: Our goal through our clinical standardization is to make sure that that patient is getting the right care and the right level of care at the right time in a way that they can understand the goals of the episode. So I think that’s a tremendous value for an individual patient and the patient’s loved ones as well, because it can be very confusing on their loved ones and family members.
Bill Frist: It’s so true. This sort of coordinated from a management service coupled with the empathy that is shown in an environment that the patient, the individual is comfortable with, just from my perspective, a physician’s perspective, adds hugely in an incremental way to acceleration to return to health, prevention of disease in some cases, followup in the post-acute space as well.
McArthur VanOsdale: The other thing that you just made me think of is for a home care episode our goal is to always see improvement, right? But there are certainly patients oftentimes that are not going to improve and need an additional level of care.
McArthur VanOsdale: I worked on a program almost two years ago now with our good friend Brad Smith to identify patients that could benefit from palliative care services significantly sooner than they would of otherwise been identified and benefited from those services.
McArthur VanOsdale: That’s something that… You know, it’s the right thing for the patient. It’s the right thing for their loved ones. They should get those services. They should get those services more timely. So I think you see, to your point around coordination and collaboration, there’s a lot of great innovative companies out there in and around this space, and for us to be able to work together just makes all the sense in the world for the patient.
Bill Frist: It’s where the future really is, developing an ecosystem around a patient, and equally important their family and their community. It’s where myNEXUS, the company that you envisioned and have built with your team… It’s where that focus is. It’s why in large part because you focused on that have been so successful.
Bill Frist: Let’s close with one question that I think about a lot, because having been at this for a while I go through these periods of not being very optimistic and throwing my hands up and saying we’re going to never solve these problems, to real optimism.
Bill Frist: Where do you… Well, at this point in time, as you look to the future with myNEXUS, but really beyond myNEXUS, our healthcare to health type approach in the home, are you optimistic in terms of the next five years or sort of neutral on it?
McArthur VanOsdale: I’m optimistic, because as we sit here today, again we’ve been focused primarily on the Medicare Advantage space, we’re creating a tremendous amount of value for our patients, for our providers, and for our payer clients, and we’re only scratching the surface. We’re talking about 4 to 5% of the total Medicare Advantage market share that we’re effectively managing today, and nobody else is really effectively managing the other 95%, right?
McArthur VanOsdale: So there is a tremendous amount of runway for us to go create more and more value for patients within Medicare Advantage. So I’m optimistic about that for us and for delivering higher quality and more care in home right, right?
McArthur VanOsdale: But I’m also optimistic to see, again, strategic investors as well as private equity investors really focusing in this space and showing that they believe in this space over the next 10, 20, 30 years, because I think that we will see a shift over that course of time into more home care. I also think home care will begin to be used in a more proactive manner versus a reactive manner after a patient has had some kind of other adverse health event.
McArthur VanOsdale: So that’s what I’m pretty excited about, because I think that if I’ll look back on myNEXUS 10 or 20 years from now, I think that what I’ll be most proud of is that we started to A, manage more care in the home, but B, manage care in a more proactive manner versus a reactive manner.
Bill Frist: McArthur, thank you. It couldn’t be better said, entrepreneur, manager, administrator, visionary in the field. Congratulations for building… Initially dreaming of and now building and continuing to build a great, great company, myNEXUS. Thank you very much.
McArthur VanOsdale: Thank you Senator Frist.
Bill Frist: This episode of A Second Opinion was produced by Todd [Schlesser 00:24:26], the Motus Creative Group, and Snapshot Interactive. You can subscribe to A Second Opinion on Apple Podcast or wherever you are listening right now. Be sure to rate and review A Second Opinion so we can continue to bring you great content. You can get more information about the show, its guests and sponsors at asecondopinionpodcast.com. That’s asecondopinionpodcast.com.
Bill Frist: Thank you again to our sponsors, Tivity Health, Change Healthcare, and Jarrard Phillips Cate & Hancock. Be sure to join us for our next episode, A Second Opinion broadcast from Nashville, Tennessee, the nation’s Silicon Valley of health services, where we engage at the intersection of policy, medicine and innovation.
