Month: November 2011

Recon takes an analytical look behind select developments in healthcare

XL Health in play: what do the three suitors see?

Tory Wolff November 18, 2011

UPDATE: United buys XL Health! Here’s what we surmised in the original post on this topic: “That leaves United. A leadership position in C-SNPs would fit well with United’s leading position in Medicare Advantage overall, #1 position in D-SNPs and #2 position in I-SNPs. The capabilities would also seem to be readily applicable to the broader Medicare population (given, for example, the potential transfers back and forth across between C-SNP and regular Medicare Advantage). The curious thing is that United dramatically reduced its C-SNP business last year (went from about

Emerging Unintended Consequences of Health Care Reform

Nikhil Bhojwani November 14, 2011

In complex system, even small changes can have big, unexpected consequences. These are occasionally beneficial but more often than not have a negative impact. Over the last year we have started to see some evidence for unintended consequences from the health care reform act. Negative impacts that we see are of two kinds: Perverse effects that directly affect the objectives of the act and side-effects that manifest in seemingly unrelated areas (see figure below). It is not the intent here to comment on the overall merits or demerits of

The CIGNA-Healthspring deal: local share key to top-line synergies but still missing from the equation

Tory Wolff November 10, 2011

Summary Provider discounts are a key priority for national accounts – which puts CIGNA (CI) and Aetna at a disadvantage; CI responding in part by trying to get closer to providers A provider collaboration strategy requires a critical mass of patients and provider mindshare. CI does not have it; nor will the Healthspring (HS) acquisition provide it given the limited geographic overlap between the two companies CI must therefore grow share in key markets to capture the deal’s potential provider collaboration synergies (though other synergies are certainly accessible) If CI

Six strategic choices made by CMS in the final ACO rules

Tory Wolff November 1, 2011

1. The final ACO rules largely maintain the demanding economic parameters for mature ACOs (Track 2) found in the originally proposed version (relative, for example, to the original PGP demonstration project): Potential for both downside and upside reward. Maximum shareable savings of 60% (less than in the original PGP demo); and the rewards are limited to an upper bound of total costs. In this regard, the ACO contract payoff locks a lot like your classic “collar” financial option (see graphic below). The starting cost benchmark based on the ACO’s actual

Month: November 2011

Recon takes an analytical look behind select developments in healthcare

XL Health in play: what do the three suitors see?

Emerging Unintended Consequences of Health Care Reform

The CIGNA-Healthspring deal: local share key to top-line synergies but still missing from the equation

Six strategic choices made by CMS in the final ACO rules

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