For DaVita subsidiary Vively, it's not just about dialysis care

Anjalee Khemlani
Senior Reporter

A newly rebranded subsidiary of dialysis provider DaVita (DVA) doesn’t just have a new name — it is expanding its mission in the battle to encourage health care providers to keep high-risk patients healthy without taxing emergency rooms.

Over the last several years, the health industry has been experimenting with payment and care models through pilot programs and partnerships. Some use financial rewards to incentivize providers to curb frequent emergency room/urgent care usage, while encouraging patients to take their medication and keep regularly-scheduled appointments.

Enter Vively Health, which was recently rebranded from DaVita Health Solutions in a full-scale effort to address the growing needs of the most vulnerable patients. Vively, which means “full of life,” is taking up the mantle of the medical group DaVita sold off in June for $4.3 billion.

“Vively is the next innovative thing DaVita is doing beyond providing core dialysis,” Hank Schlissberg, president of Vively told Yahoo Finance in a recent interview. Warren Buffett’s Berkshire Hathaway (BRK) is a major DaVita shareholder.

Schlissberg said the work DaVita is doing could, with Vively, prove a model that shows the high-risk, high-utilizers of the health care system should receive specialized emphasis by the industry.

“The highest risk, chronically-ill are a group among themselves,” he said. “They should have their own carveout risk pool.”

LAKEWOOD, CO - NOVEMBER 14: RN Corinna Montesano checking Bernard Trujillo's heart beat during his 4 hour session at DaVita Lakewood Dialysis Center November 14, 2018 Lakewood, Colorado. (Photo by Joe Amon/The Denver Post via Getty Images)

Vively, which has a staff of 35, is hoping to be a leader in taking on risk in health care services for some of the country’s sickest patients. It means the company will only see revenues from governments and insurers if it achieves shared savings.

Schlissberg told Yahoo Finance the company can take on full risk because of the backing from the parent company. He declined provide exact figures of DaVita’s investment, but said the company has “a very fair and appropriate” budget at its disposal.

DaVita has been criticized for its pricey services and how it operates. Yet Schlissberg rejected the idea those critiques played a role in the Vively rebrand.

The company “is actually much broader than kidney care,” he said — emphasizing that Vively was not a “venture-backed company on a burn.” He added that “we wanted to eliminate confusion that it’s just for [DaVita’s] own dialysis patients.”

No ‘parlor tricks or manipulation’

Prior to being sold to Optum, DaVita’s former medical unit leveraged in-home visits and post-acute care follow up for primarily older patients with chronic illnesses. This population averaged more than 20 hospital visits annually, and consume 51 medications on average per year.

During its run, DaVita’s medical group helped around 4,000 patients by cutting ER visits by 20%, hospital admissions by 36% and lowering readmission rates by 15%. Vively, whose 2016 pilot program in Philadelphia showed similarly positive results, hopes to pick up where DaVita’s medical arm left off.

Vively, however, acknowledges that a drawback to its ambitions is a program designed mainly for urban, densely populated areas. Scaling up to provide services in a rural setting is a goal, according to Schlissberg, and a challenging one.

It remains to be seen if Vively can prove sustainable savings, and figure out how to scale up serve a broader population. Yet Schlissberg suggested the proof would be in the pudding.

“This can’t be a parlor trick or manipulation of data,” he said.

As of now, the company is scaling up by finding partners in the communities it wants to serve and finding doctors to participate. It also has to build out a lengthy list of team members that include physician assistants, nurses, behavioral health professionals and pharmacists, and find the money to do it.

“Everything that it costs to build is on our nickel,” Schlissberg said.

Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem

Follow Yahoo Finance on TwitterFacebookInstagramFlipboardSmartNewsLinkedIn, YouTube, and reddit.

Read the latest financial and business news from Yahoo Finance