September 12, 2024 – Invest Spotlight On: Sohail Masood, Founder, Chairman & CEO, KabaFusion
LEXINGTON, Mass., September 2024 — In an interview with Invest:, Sohail Masood, founder, chairman, and CEO of KabaFusion, discussed the company’s mission to provide comprehensive home infusion services, focusing on intravenous immunoglobulin treatments. He highlighted key milestones, such as partnering with Novo Holdings and receiving the Ernst and Young Entrepreneur of the Year National Award.
What is KabaFusion’s mission and the range of services it provides?
KabaFusion is a national home infusion company, providing nursing and intravenous drugs at home. I’ve been in this industry since its inception in the late ’80s and early ’90s, and this is my third home infusion company. We have 29 pharmacies and cover nearly 45 states. Most of our nurses are our employees, though we sometimes contract with outside agencies. We have around $1 billion in revenue and 1,700 employees. We’re contracted with major payers, including Medicare, Medicaid, Blue Cross Blue Shield, Aetna, and United.
Our main focus is intravenous immunoglobulin, a biological product derived from human blood used for neuromuscular diseases, dermatological disorders, and primary immune deficiency. Often, patients are discharged from hospitals needing continued therapy, such as for Lyme disease or osteomyelitis. KabaFusion takes over when they get home. Sometimes patients come directly from doctors’ offices for neuromuscular or primary immune deficiency treatments. After insurance authorization, we schedule a nurse to administer the infusion at home.
What are some of the key milestones or achievements KabaFusion has accomplished over the last year?
About a year ago, we changed our investment partners. Pritzker, our investor for five years, exited, and Novo Holdings from Denmark, owner of Novo Nordisk, became our partner. Another milestone we’re proud of is receiving the Ernst and Young Entrepreneur of the Year National Award, both for KabaFusion and myself. This recognition reflects our commitment and success in the home infusion industry.
Where are you seeing the highest demand for your services?
There are many new drugs coming out, especially monoclonal antibodies, which are lab-created drugs targeting specific diagnoses, similar to our main focus, immunoglobulins. Gene therapy is also becoming mainstream, though it’s challenging to manage at home. To address this, we’re creating ambulatory infusion centers (AICs) where patients can walk in and receive treatments.
There’s a growing trend toward injectable drugs for conditions like diabetes, hypertension, and high cholesterol. These drugs are very expensive. Insurance companies are looking for cost-effective infusion settings since hospital-based infusions are very costly. Providing these treatments at home is becoming the preferred method.
How do you work with insurance companies to get treatments approved?
Many treatments we get approved are for non-FDA-approved indications, so we must prove their necessity to insurance companies. For instance, some adults with Down syndrome experience Down Syndrome Regression Disorder, where they regress in functioning. We found that IVIG is effective for this, restoring patients to their normal functioning. We advocate for these treatments on behalf of our patients. This success is due to our knowledgeable clinicians who effectively communicate with insurance companies to get diagnoses approved, even for orphan diseases. We secure authorizations and provide services much faster than hospitals, which doctors greatly appreciate.
How has the economy and high medication costs impacted your business?
The high costs of medications have led to payers renegotiating rates with us, shrinking our gross profit margins. We’ve had to negotiate better prices with manufacturers to maintain profitability. Additionally, Medicare’s payment methodology, Average Sales Price (ASP), is unfair and undervalues the services we provide. This could be my next battle with CMS to ensure fair compensation. If not resolved, companies like ours might stop accepting Medicare Part B patients, which would leave them without care options.
How is KabaFusion leveraging technology to enhance service delivery and patient outcomes?
We constantly look for ways to innovate. Our focus this year is on automation to improve efficiency and reduce costs. We’re streamlining every process from referral to service delivery to shorten response times. Technology is integral to our operations. With telehealth and remote patient monitoring, we track patients after they leave the hospital to ensure they’re not developing side effects or missing doses. We provide home monitoring equipment for vital signs, integrating this data into our care management.
Security is also a priority. Our chief compliance officer and chief IT security officer ensure our systems comply with HIPAA and protect patient data. Despite frequent cyber threats, we’ve successfully defended against them so far.
What is your assessment of the labor pool in Boston, and how are you attracting and retaining top talent?
In Massachusetts, hiring is challenging due to a limited labor pool and our Lexington location’s lack of public transportation. Conversely, our Los Angeles branch benefits from a larger pool of potential employees. Our employees are highly trained, and home infusion work is very different from retail pharmacy roles. We need many nurses to travel long distances across New England to provide services.
To attract and retain staff, we offer a supportive work environment, competitive salaries, and comprehensive benefits, including a 401(k) plan with matching and excellent healthcare. Despite these efforts, we still struggle and must pay top dollar to secure employees. This becomes even tougher when insurance companies cut our reimbursements.
What are some key partnerships with educational institutions or other industry players?
We have partnerships with pharmacy schools in New Jersey, Los Angeles, and Boston, where students can do internships. We also offer a residency program for new pharmacists to spend a year with us learning about home infusion, and most stay on as employees. We have similar programs in our legal department, with law students training with our team, helping us build a strong legal and HR department. We’re also expanding our efforts with nursing programs, especially at MCPHS University.
What makes Boston a great place for business and entrepreneurship?
Boston is a hub for investment, IT, and biomedicine, with many pharmaceutical companies located here. We have excellent relationships with manufacturers, like our main partner Takada, which is right across from our office in Lexington. The highly educated population here gives us access to graduates from top colleges like Harvard, MIT, Boston College, Boston University, Wellesley, and Babson. This provides a diverse and well-educated talent pool. Additionally, Boston Logan Airport is a busy international hub, making it convenient for our decentralized staff who travel frequently and for connecting with our partners in Denmark.
What are your top priorities for KabaFusion over the next two to three years?
Our top priority is to continue providing the best care for our patients while growing our business. This year, we aim to increase our revenue from $1 billion to $1.5 billion through organic growth and acquisitions. We’re in active discussions to acquire a company before year-end. We strive for a healthy 30% year-over-year revenue growth and maintain a strong EBITDA. We plan to expand our presence in states like New Mexico, Arizona, Washington State, and Oregon, and grow our ambulatory infusion centers.
Home infusion is unique, falling between a CVS and a major hospital. Many patients don’t realize they can receive the same treatments at home. Often, doctors direct them to hospitals or offices for infusions without mentioning the home option. Our goal is to raise awareness about home infusion services and ensure patients receive care in the best setting. Hospitals are necessary sometimes, but it shouldn’t be about making extra money at the patient’s expense.
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About KabaFusion
Headquartered in Cerritos, CA and Lexington, MA, KabaFusion is a national provider of essential chronic and acute infusion therapies. The Company serves patients in 46 states through its nationwide network of home infusion pharmacies, alternative infusion sites, and home health agencies. KabaFusion was founded in 2010 by Chief Executive Officer Dr. Sohail Masood, a pioneer in patient focused infusion therapies with more than 30 years of clinical experience. The Company is dedicated to working proactively with patients, healthcare practitioners, and payors to provide comprehensive support before, during, and after treatment. For more information, visit www.KabaFusion.com.
Original interview: https://capitalanalyticsassociates.com/spotlight-on-sohail-masood-founder-chairman-ceo-kabafusion/