Posted by on in Network strategy, Providers

UPMC’s recent spectacular deal-making careen through central Pennsylvania (picking up the big Susquehanna and Pinnacle systems as affiliates and Tower as a joint venture partner all in under a year) contrasts oddly with its tentativeness at home: in mid-September, UPMC unexpectedly scuttled plans to build a 90-bed, $211M hospital in the South Fayette suburb of Pittsburgh just a week after signing a deal with a developer which would have launched construction. Spokespeople said UPMC is “pursuing other, more significant strategic options” (per Pittsburgh TribLive). Perhaps UPMC caught early wind of the latest contrivance of its local… Read More

Posted by on in Network strategy, Payers, Providers

On May 10, Highmark and Geisinger announced plans for a clinical joint venture to create community-based care in four rural north-central Pennsylvania counties. The target counties are small (200K lives total), largely peripheral to Geisinger and Highmark core markets, and are already served by the Susquehanna Health system. Why all this complexity and investment to launch a battle for 1.5% of Pennsylvania’s population? Look at the whole board The move should be understood in the context of the widening struggle between Highmark and UPMC. Consent decrees have temporarily fixed some dimensions of competition in western Pennsylvania by requiring in-network… Read More

Posted by on in Consumer Health, Network strategy, Providers

Warburg Pincus, the new majority owners of CityMD, a 68 site urgent care chain, will need to bring plenty of capital to an urgent care industry approaching its endgame. CityMD competes on a national stage against the likes of TPG’s Access Clinical Partners and UnitedHealth’s MedExpress. And rapid shifts in individual markets are raising the strategic stakes: where once urgent care could remain independent, today it is increasingly being asked to take sides in the share battles among big delivery systems. In November 2016, for example, Banner completed its acquisition of 32 sites in Phoenix and Tucson and earlier this… Read More

Posted by on in Network strategy, Providers

With new two affiliations, Ochsner Health has solidified its clinically integrated network in the most populous parish (East Baton Rouge) and built a beachhead in the one part of the state where it lacked a partner (the northeast). The two new partners are General Health System in Baton Rouge (announced in late March) and Glenwood Regional Medical Center in Monroe (announced in early April). These affiliations have a several implications: Ochsner Health Network is now viably state-wide. Its affiliates are directly present in 11 of the most populous 15 parishes in the state and the remaining 4 (Livingston,… Read More

Posted by on in Network strategy, Payers, Providers

Earlier this month, Mercy Health announced deals to dismantle HealthSpan (the former Kaiser business in northeast Ohio acquired in 2013), selling the insurance arm to local powerhouse Med Mutual, dissolving the medical group, and transitioning physicians to various northeast Ohio providers. 2015 was supposed to be a growth year for the business, but membership declined across lines of business, PMPM costs ballooned and Exchange risk adjustment obligations wreaked havoc with the bottom line ( HealthSpan is said to cover 160K lives total, of which half are risk with the legacy Kaiser operation and its PPO sister and 45K Mercy employees… Read More

Posted by on in Consumer Health, Network strategy, Providers

This past January, Walgreens assigned operational control of 56 in-store clinics to Advocate Health. The deal signals another intensification of the already fierce hospital competition in Chicago, and may have implications for the future of urgent care broadly. Prisoner’s dilemma Healthcare’s market failures often prevent the timely exit of redundant capacity, so any new care capacity ends up raising – rather than reallocating –fixed costs across a market. Urgent care, which is enjoying widespread and rapid growth, can be an exception: many providers lack the scale and geographic concentration of patients to support attractive after-hours care. As a result,… Read More

Posted by on in Network strategy, Payers, Providers

Mercy Health – the largest system in Ohio – has recently formed a Clinically Integrated Network (CIN) with Summa Health called Advanced Health Select. CINs allow separately owned provider systems to jointly contract with payers on a risk basis as well as invest in clinical systems to support consistent practice and joint accountability. The model offers some key advantages of affiliation (joint economics and investment) without the regulatory hurdles, governance challenges and business risks change of control usually entails. Mercy and Summa had two prior business relationships: First, Mercy holds a 30% share of Summa (and… Read More