Deacon Health Launches With Eye on TEAM Model

These days Nashville seems to be the hub of startup activity in the value-based care space, and one of the newest entrants is Deacon Health Inc., a technology-based specialty care management provider targeting polychronic care for musculoskeletal (MSK) patients. 

The startup works with hospitals, accountable care organizations, and payers to help their specialty surgeons better navigate care before and after surgery. This will be especially important when the mandatory Transforming Episode Accountability Model (TEAM) goes live on Jan. 1, 2026. The CMS alternative payment model was designed based on lessons learned from previous episode-based payment models. The surgical procedures included will be lower extremity joint replacement, surgical hip femur fracture treatment, spinal fusion, coronary artery bypass graft, and major bowel procedure.

In April Deacon announced a seed funding round with $7 million in closed and committed capital from Herb Fritch, founder and former CEO of HealthSpring; Larry Cash, former president and CFO of Community Health Systems; and David Vandewater, founder and former CEO of Ardent Health Services; among other parties.

The company is led by CEO Kyle Cooksey, a former exec of fast-growing Monogram Health, also based in Nashville. It partners with health plans to provide their members with an evidence-based renal care model of clinical managed services, including complex case and disease management, utilization management, and medication therapy management, to improve patient outcomes and quality of life while reducing costs for the healthcare system.

As an article in the Nashville Business Journal explains, Deacon Health grew from technology it acquired from Episode Solutions, where Cooksey spent roughly seven months as president and four months as CEO.

Deacon Health said it provides coordination of care focused on a conservative approach that seeks non-surgical care pathways when medically appropriate. Using evidence-based care plans and high-touch physician coordination, Deacon Health said it prioritizes a patient-centered model to ensure the patient has the best possible journey and outcome while reducing unnecessary visits and costs.

Cooksey sees a huge opportunity with the TEAM model. “It is very uncommon for CMMI models to be mandated, but TEAM is mandated for nearly 800 hospitals,” he said.

“Post-discharge processes have historically not financially fallen on the shoulders of hospitals. Hospitals are brilliant at managing the inpatient utilization, but they had no concern for physical therapy utilization, for instance,” he explained. “But now, all of a sudden, on January 1, it is on their shoulders. They are responsible for total cost of care over that episode. They don’t have the experience, technology or clinical prowess to manage such a meaningful dollar spend post-discharge. I've met with over 150 hospital execs the last 90 days, and consistently what I'm hearing all of them say is, we want to buy, not build, a solution.”

Besides putting full episode financial risk on hospitals, including post-acute care costs, TEAM also requires new coordination and documentation, including mandatory primary care referrals, and puts increased pressure on health systems to reduce readmissions and improve care transitions, according to Deacon. 

Deacon came up with its own TEAM acronym to describe how it works with hospitals and patients: 

• Triage high-risk patients before complications begin;
• Engage patients early to boost adherence and reduce avoidable utilization;
• Align hospital, provider, and post-acute care teams with real-time visibility; and
• Manage recovery with nurse navigators who keep patients—and costs—on track.

In a statement, investor Larry Cash offered up an explanation for why Deacon’s model is a good fit for the current healthcare situation: “For the past three years, the cost of healthcare has increased by more than 5% each year. Given the complexities of our healthcare system, providers and payers face an especially challenging situation – controlling healthcare costs while continuing to provide quality care,” he said. “With extensive experience and expertise alongside its proven technology, Deacon Health is well positioned to partner with healthcare organizations to successfully participate in value-based care, improve quality, and control cost.”

Cooksey stresses the importance of looping in the primary care practice. “There's such value in bringing the patient back to see the PCP so that there's continuity in the care,” he said. “I think that's very much a benefit of what's happening in the value-based space. It's sort of an easy win, right? We believe clinicians have a responsibility to tie that patient back to the PCP. I believe we will be more successful with those Medicare patients when that patient is back under their care.”