Posted by on in Payers, Providers

Summary Earlier this year, Catholic Health Partners, the largest provider in Ohio, signed two deals which put it on a competitive collision course with Cleveland Clinic Cleveland Clinic has few options to further solidify its already strong position inside Cleveland, so it had to look elsewhere for a competitive response  With a clinical affiliation with Promedica, Cleveland Clinic can competitively threaten Catholic Health Partners in Toledo / northwest Ohio If Cleveland Clinic’s relationship with Promedica matures into a full affiliation, they could acquire Promedica’s Ohio insurance license, opening a whole new range of potential strategic pathways for Cleveland Clinic… Read More

Posted by on in Payers

When it comes to employee benefits, employers need to be generous either to attract and retain talent or because it is “the right thing to do”. The recession and jobless recovery has unquestionably reduced the first imperative and it appears now that the employer mandate penalty may perversely be gutting the second. Why? A classic paper in the Journal of Legal Studies (Gneezy, Rustichini 2005) looked at the impact of introducing fines for parents who were late to pick up their kids at daycare centers. Lateness INCREASED. Subsequently when the fines were removed, the increase in lateness persisted. Read More

Posted by on in Payers, Providers

In our last post we introduced two potential scenarios. “Provider bastions” in which buyers of health care services select upfront the network that they will trust to deliver their care in a coordinated manner.  “Value-based deconstruction” in which buyers of healthcare choose the site-of-service for every interaction with the delivery system based on incentives built on micro level information about value – outcomes and cost.  Obviously there are factors unique to firms that will have a tremendous impact on optimal strategic choices for them. All we do here is raise some key strategic implications at a high… Read More

Posted by on in Payers, Providers

It seems like every day there’s some news outlining strategic actions that various players are taking or other developments with respect to health reform. Here’s a sample of recent news: Employer adopts a tightly limited provider network  Customers sign on to private exchange Hospital chain grows through acquisition Insurers boycott state exchange Health systems drop out of ACOs Payer collaborates with provider systems to target Medicaid population All of these represent choices or “bets” that firms are making based on a view of a healthcare world facing… Read More

Posted by on in Payers

In 2011 we commented that while the health reform law, the ACA, had several positive intended consequences, it also could spawn several perverse effects and side-effects. Now in an attempt to ward off some of those unintended consequences, the administration has delayed the employer mandate from 2014 to 2015. Reactions range from praise (from the unlikely alliance of Democrats and business groups), derision (from Republicans and right leaning think tanks) and bemusement or befuddlement (across the spectrum). Of course, perturbing a portion of a complex system has ripple effects of its own. Here’s one that we’re… Read More

Posted by on in Payers, Providers

Answer:  When they form an industry association! Back in February, a group came together to form a national association for ACOs (NAACOS) to, according to the announcement press release, promote the growth of the model, industry standards, best practice sharing and vendor engagement.   What was missing from the press release was fixed on the web site which adds as goal #2: “Participate with Federal Agencies in the development and implementation of public policy”.   In other words: lobbying.  And, of course, as the model evolves from Medicare to commercial and Medicaid populations, state level policy will also need to be factored in.  Earlier this week, Florida saw… Read More

Posted by on in Providers

Summary The deal locks in an option for Cleveland Clinic to grow its clinical practice transfer business 4x its current size and much larger than Cleveland Clinic’s peers There will be significant challenges to executing given the wide geographic dispersion, Community Health Systems’s mostly unranked facilities and strategy of using the hospital “channel” to drive change in care practice In the long run, the deal will reinforce Cleveland Clinic’s advantage in Big Data (it will take time to realize this) Community Health Systems faces little competition in many markets, potentially giving them an ability to influence payers towards reimbursement models… Read More

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At a TEDMED conference a couple years ago, I had to write some sample “ask me” questions on the bottom of my ID badge as conversation starters. One of them was “Ask me why PHIX+ACO=:-)” Given the presentations on 3D tissue printers and technologies to help blind people just about see again, I was not surprised to have few takers. However, recent news from Minnesota suggests that others see the potential in combining risk-taking providers with exchanges. Medica – one of the early leaders in private exchanges with Bloom Health — is expanding the offerings on its My… Read More

Posted by on in Uncategorized

Summary Highmark and the West Penn Allegheny Health System (WPAHS) are not aligned on their vertical strategy to counter UPMC in the Pittsburgh market  WPAHS can only absorb a portion of Highmark’s care demand now being met by UPMC. So its upside on the success of Highmark’s vertical strategy is capped Highmark would prefer a deal with UPMC if it get reasonable rates: the status quo looks better than the uncertainties of a vertical model build A large share of UPMC’s business still comes from Highmark which makes UPMC vulnerable. Ironically, the more credible Highmark’s vertical model threat, the more… Read More

Posted by on in Uncategorized

Summary Two major hospital systems have agreed to a joint venture to explore growth opportunities on a “case by case” basis One system is a major non-profit, the other a PE-backed for profit serial acquirer; their strategies, capabilities and geographies of both partners do not overlap The venture is likely focused on sharing capabilities and allowing each partner to take those back to their core markets Given the complementary skill sets, competitors to either system would be wise to expect upgrades in traditional weak spots * * * A few weeks ago, two major provider systems — IASIS… Read More