Last week, financial services and insurance company Nationwide announced that its venture capital team had leveraged its $100 million venture capital fund to invest in Vesta Healthcare.
In the release announcing the investment, Nationwide asserted its desire to improve in-home care, saying it wanted “to make sure patients and in-home health care providers are getting the support they need.”
New York-based Vesta, the developer of Hometeam and formerly known as HT Health, is a technology and clinical services company that connects caregivers and care teams through its platforms.
In 2018, Vesta Healthcare transitioned away from a direct-to-consumer model. Now, the company’s model is based around partnering with other agencies and insurers. The other transition the company made was moving from private pay and Medicaid to a structure based on Medicare-Medicaid dual eligibles.
Erik Ross, Nationwide’s managing partner of venture capital and open innovation spoke with Home Health Care News about the future of in-home care and his company’s investment in Vesta. During the interview, he was joined by Kristi Rodriguez, Nationwide’s vice president of financial thought leadership.
The highlights from HHCN’s conversation with Ross and Rodriguez are below, edited for length and clarity.
HHCN: What is the goal of Nationwide’s venture capital fund?
Ross: We make investments in early-to-late stage companies that are strategically aligned with Nationwide. We look for opportunities where we can either accelerate a current business that we’re working in or to position ourselves somewhere for the future. And with those portfolio companies, we look to partner with them as well as a way to provide insights to Nationwide and co-create solutions. That’s our main goal.
Why is Nationwide paying attention to the in-home care industry?
Rodriguez: As a part of thought leadership, we have a team called the Nationwide Retirement Institute. For the last 11 years, we’ve been curating data and insights from consumers and our advisor community. One of the most compelling surveys that we have is correlated to health and wealth in long-term care.
Some of the aspects we found were startling. One of the major components that came out of that survey is that 54% of those individuals over the age of 50 — when asked if they’d go to a nursing home — said that they would rather die than go to one. That’s astonishing. Over 74% said that they would prefer to stay in their home. This sentiment is also echoed by their caregivers.
We’re uniquely focused on this because we want to address the need that we’re seeing with longevity, and also with where individuals want to receive care during their most vulnerable years.
[We’re thinking about] how can we really address this issue and be at the forefront.
Why is this idea of people wanting to stay at home such an urgent concern?
Rodriguez: We’re in a sandwiched generation. Not only are the caregivers at a point where they have to care for those individuals who are aging, they also are preparing for retirement themselves.
We saw this as a unique opportunity to curate conversations as people are going through this change, so they can make their wishes known to their family and also start financially preparing. And then, also, to give them the assistance they need as they’re caring for those aging adults.
I think that the need now has never been more compelling. At some point in the 1900s, the average age individuals were living to was 47. Now, children born today have a 70% chance of living to 100. To me, that is really the crux of the conversation, and Nationwide is in a unique position to take a position on that and also offer solutions.
According to worldbank.org, a child born in the United States in 2017 has a life expectancy of 79.
Ross: The only thing I would add is some macro trends. Right now, we know that the population of those 65 and older is going to be skyrocketing over the next 20 years. And we know there’s a caregiver shortage. About 95% of family members that are unpaid caregivers provide an estimated $500 billion worth of free care to their families. On top of that, employers lose around $33 billion per year due to employee caregiving responsibilities.
We’re at a nexus in time where this is going to continue to become a challenge. We’re trying to look for opportunities to ease that burden on our members and look for opportunities that can help them age in place.
The caregiver issue seems very central to the mission in this partnership. Why is that?
Ross: Technology is going to have to play a big role in how this continues to develop. The reason that we liked the Vesta platform is because it gets all of the different parties looking at one version of the truth — between the provider, the plan, the patient, the family members and the caregiver. It’s a central point that enables that care for acute conditions that has everybody looking again at the same place. We believe that more technology-enabled solutions like this are going to be needed as the future continues to unfold.
What was it about Vesta’s capabilities that intrigued you?
Ross: They have domain expertise in the space. The investor syndicate is very much behind this as well. We look for strong founders and management teams that have the domain expertise and understand the ecosystem, as well as the technology that’s needed to serve them.
The Kaiser Permanente folks are also investors on the board. They’re very much interested in this space. We’ve had a number of conversations with them about how we can continue to build this partnership.
Where do you guys picture nationwide in the future of home care?
Rodriguez: We really have three opportunities or places, I think, where we could do more. For one, it’s really starting that conversation. So helping individuals to think about and identify their long-term care options and letting them know that home health care is a viable option.
From Nationwide’s standpoint, it’s about getting patients to understand what options they have. For instance, we have a CareMatters program that has a cash indemnity that will allow individuals to pay their caregivers. We know that 62% of caregivers spend their own money on this, and so we are looking for solutions to allow those individuals to pay their loved ones for giving them care that they desperately need and want to reward them for.
It’s about starting the dialogue and identifying solutions that we can use to assist in home health care. And then really starting to have an advisor conversation and help them by offering our solutions as well as others to understand what long term goals are and how to make them a reality. That includes home health care.
Ross: From a [venture investment] perspective, there’s a handful of places that we think about this from a thesis perspective. One would be holistic planning services that combine health, finance, lifestyle and aging-in-place technology — similar to Vesta’s other technology that would help people live and age in place. Also, fraud solutions that would help protect our members as they continue to age.
And also other financial solutions that are sort of novel. Most people do not have enough money as [they live longer]. What novel solutions are being created that could help people age in place? Those are a handful of places that we look at from the investing side.
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