To put it plainly, the home is important at Cardinal Health.
This is the message Rob Schlissberg — president of Cardinal Health’s at-Home Solutions business — believes that his company is getting across after an organizational resegmentation. The shakeup allowed Cardinal Health’s at-Home Solutions business to branch out from under the company’s medical-surgical (med-surg) unit.
“We want to be a major player and an enabler, as we are continuing to find ways to drive that care,” Schlissberg said during a recent conversation with HME Business.
For Cardinal Health, being a major player also means being a vocal advocate for the HME industry. During the course of the conversation, Schlissberg touched on why the diabetes space is a big area of focus for Cardinal Health — and more.
The conversation has been edited for length and clarity.
HMEB: Looking back at 2023, what would you say were some of the major highlights for your part of the business?
Schlissberg: Within our at-Home Solutions business, we really operate in three different business segments. In what we call our Cardinal Health at-Home business unit, which is our direct-to-home fulfillment and distribution services, we’re primarily focused on the HME space, but also in home health and hospice.
We have been really focused around investing to optimize and modernize our distribution network. We know that’s a real value that we can provide. We look at it as we are an extension of our customers. We’re providing a service that goes directly to their patients, and we take that very seriously.
In 2023, we opened a new facility here, in Grove City, Ohio, that is highly automated and very technology enabled. We started work at another location in South Carolina, which is set to open this calendar year. We’re already in the Texas market, but we’ll be expanding and building a larger site.
All these will have the same advanced technology. We’ll be up to 10 or 11 buildings at that point. What I think is really unique about our distribution network is it only does our business. The rest of Cardinal Health has other distribution networks. There’s a distribution network for pharma, for med-surg, but ours only does direct-to-home fulfillment.
In our provider side of our business, which is Edgepark, I’m super proud of the work we have done really to focus on the customer experience. We’ve hit all-time highs with our NPS [net promotor scores] this past year, really focusing on simplifying a really complicated process.
The DME benefit is a complicated process, particularly for the patient, and now navigating the DME versus pharmacy benefit, and all the challenges that come along with that. We really try to find ways to simplify and create that ideal experience for the actual end user, as well as our referral sources.
We have been building a new business that we call Velocare, which is really a first-of-its-kind distributed supply chain logistical solution for health systems trying to set up a hospital-at-home program.
We are helping them transition patients to the home, providing all the medical supplies and DME they need in the home. We handle medical-grade meals and waste disposal. All the things that you would get in the hospital — that bed just happens to be in the home instead of in the brick and mortar.
We are enabling that type of service, which is something that we’re really excited about, and will continue to invest in and look to grow. All three of our businesses are in good spots, and we’re excited about what’s ahead.
Can you provide an overview of some of the strategic plans and objectives that you’ll be focused on in 2024?
On the provider side, Edgepark, strategically we’re going to be heavily focused in the diabetes space. The population of those with diabetes continues to grow.
When you think about some of the changes that the U.S. Centers for Medicare & Medicaid Services (CMS) has made recently (expanding coverage of CGM [continuous glucose monitoring] Type 2, basal insulin users), that market is growing. Our ability, as one of the larger diabetic providers in the country, is we provide a service that is needed, so we’ll continue to focus there both with our commercial populations, but really heavily focused on our government populations.
When you think about those chronic conditions that we serve, what comorbidities do these patients have? It might be something like a large portion of diabetics also have sleep apnea, for example. How can we provide a more comprehensive type of care with the supplies and services that we provide?
What specific initiatives or areas of focus does Cardinal Health have in mind to drive growth and innovation in the HME industry this year?
Recently, as a broader enterprise, our CEO Jason Hollar announced a resegmentation of the business. We used to have two segments in the company, our pharmaceutical business and our med-surg business.
As the home care business unit, we’re underneath that med-surg unit. He recently announced that our business, as well as a couple of others, were going to move out of those larger umbrellas.
Why? Because those are the areas that we believe, as an organization, that we’re going to continue to invest in and grow. [Those areas are] our at-Home Solutions business, but also our nuclear and precision health solutions, which is in the pharmaceutical space, as well as our OptiFreight Logistics business unit.
Through sort of our simplification work, as a broader organization, we said, “We’ve got these large core anchors of Cardinal Health, but we’re going to really pick these three areas to focus on, in addition to the specialty pharmaceutical area.” That’s a roundabout way of saying the home is important.
We want to be a major player and an enabler as we are continuing to find ways to drive that care.
What challenges does the HME market face?
We need more strong voices for the HME industry.
AAHomecare [American Association for Homecare] does an outstanding job. We as a company like Cardinal Health, who is large in size and stature across the health care continuum, we’re trying to have a bigger voice.
We serve on certain committees within AAHomecare; we have lobbying efforts down on the Hill. We want to make sure that the HME itself is being recognized for the value in which it delivers. I think there are still entities and different parts of the healthcare system that believe that all HME [suppliers] do is push products — and that’s not true. The pandemic helped shed light on the value that HME can provide, so we want to be a big part of that and lend our voice to moving that forward.
Also, as with any aspect of healthcare, reimbursement is the name of the game. Continuing to advocate on that behalf and making sure that value is commensurate, on all sides, is certainly an area of focus.
What do you see as some of the major tailwinds that will fuel the business in 2024?
The expansion of the market in the diabetic landscape, CMS expanding coverage for CGM. CGM is the right type of therapy, and more should have access. Now that that Type 2 population, if they are using insulin, can get access to that type of therapy, I think it’s really important. That’s certainly a tailwind.
Also, you can’t open up any publication that is talking about healthcare and not have it mention the word “home.”
What kind of technology are you watching most closely? Which are you most excited about?
It’s those technologies and automation aimed at how we run our distribution network better.
We’re about 60% through our sites implementing a new warehouse management system. We’ve implemented a new inventory planning system. We are installing new automation in our new facilities and working to retrofit the old facilities in what is called the auto store.
It really helps us improve quality. It helps us make the usable square footage in our buildings greater. We can do more things for our customers, so we are constantly looking at things to further automate our facilities. First and foremost, to ensure we’re providing the best quality and the best experience for our customers.
We are investing in technology to help run our Edgepark business, as well. To really improve the patient and HCP [healthcare provider] experience, and also really improve what we would call our agent experience. The folks that we have on the phone talking to those people. If we can create the experience for them, that’s going to translate into a better experience for whoever’s on the other end of that call. We’re keeping an eye on everything else that is out there. How can we further integrate with EMRs [electronic medical records]? How can we provide a more seamless and simplified experience?
Robert Holly contributed to this report.