VC Insider Chris Booker: There’s Definitely More Capital Moving Toward Home-Based Care

The degree to which venture capitalists were interested in at-home care may have been overplayed at one point. But that’s becoming less and less the case.

That’s according to Chris Booker, a partner at the Nashville, Tennessee-based venture capital firm Frist Cressey Ventures, which has itself frequently invested in the at-home care space.

“From a home health perspective, the market connects with COVID, because now everything is moving into the home,” Booker said during the Home Health Care News Capital+Strategy event earlier this month. “Really, health care is just moving into the home, [in general]. And so that’s what we’re seeing, in particular on the venture side.”

Frist Cressey Ventures is a VC fund focused on accelerating the growth of high-potential health care enterprises through value-added partnerships. It invests in technology and service businesses that provide solutions for higher quality of care, system integration, patient outcomes, population health and well-being.

Its portfolio includes companies like CareBridge, Aspire Health and Ready, a home-based care startup that coordinates a team of “Ready Responders,” individuals trained as EMTs, paramedics and nurses.

“So there’s definitely a lot more venture capital moving in this direction,” Booker said. “But what we’re seeing is it being more earlier-stage venture capital, in the markets that aren’t as mature.”

Those less mature markets include areas that have really exploded during the public health emergency: home-based primary care, home-based urgent care and hospital-at-home models.

In those areas, regulation has not yet caught up to the market. Reimbursement and logistics can be a struggle at the outset, but firms like Frist Cressey Ventures are willing to take on some of that risk when investing in companies that are moving toward more home-based and innovative futures.

Palliative care, for instance, was gaining popularity years back in a way that those new models are now.

William Frist, a former U.S. senator and one of the founders of Frist Cressey, started Aspire Health in 2013. Aspire then became the largest palliative care provider in the U.S. before it was acquired by Anthem (NYSE: ANTM) in 2018.

Alongside Brad Smith, the current leader of the Centers for Medicare & Medicaid Services’ Innovation Center, Frist capitalized off of one of those less mature markets.

The firm sees the same potential in the new models that have picked up traction during the COVID-19 crisis.

“We’re also seeing some things go into the home that I never in my career thought we would see,” Booker said. “Surgeries, for example, or mobile anaesthesia. … So from a venture standpoint, instead of just your traditional health models, we’re looking at some of these newer models that are going to be delivered to the home that you can kind of [count] as home health.”

Some of the home-based companies that have garnered attention from venture capitalists recently are Papa, the senior companionship on-demand startupDispatchHealth, an urgent medical care provider; and, again, Ready, which announced a $54 million Series C round in September.

DispatchHealth also has launched a hospital-at-home model, joining other companies such as BayCare and Lifesprk, which have either launched hospital-at-home programs on their own or facilitated them in the last year.

“People are looking to take risks,” Booker said. “And they realize that some of the services that can be offered now are really able to lower the overall cost of care.”

VCs won’t be the only players looking into home-based care either. Hospitals will also be trying to find ways into the home, with individuals shying away from institutional-based settings, Booker said.

“One of my predictions for the next year is that you’re going to see a atypical investors, like large hospital systems, starting to acquiring some of these assets to build the kind of hospital-health care future of the model, which is the hospital and home health kind of merging into one,” he said.