Month: September 2013

Recon takes an analytical look behind select developments in healthcare

Metrics alone will not unleash the market: Porter and Lee ignore the demand side to the peril of their proposed strategy

Summary Michael Porter and Thomas Lee have articulated a strategy for fixing healthcare focused on restructuring providers and assessing them based on metrics “that matter to patients” The most compelling example they cite of system-wide improvement (vs. anecdote) is the case of IVF where public outcomes reporting demonstrates widespread and consistent performance improvement However, the IVF story has several unique features which make it an exception rather than a model for improving healthcare System improvement cannot be a matter of supply-side restructuring and outcomes metrics: market forces needs to be

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Quiet after the storm: Is there an emerging competitive equilibrium in Ohio?

Summary In August and early September, several Ohio provider systems have picked sides in the competition between Catholic Health Partners and Cleveland Clinic The recently announced Health Innovations Ohio collaboration signals that Catholic Health Partners is playing for the overall Ohio market; however, there is no clear, attractive competitive response for Cleveland Clinic Cleveland Clinic lacks a footprint in populous southern Ohio to match Catholic Health Partners but it is not obvious which systems there would seek an alliance or an acquisition Cleveland Clinic and Community Health Systems joint venture

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Strategic “crowd-out” via narrow networks: an emerging case study in Wisconsin

Last week, I argued that, if payers want to secure competitive advantage from improved provider care, they would need tighter, more exclusive alignments with these providers to “crowd out” the free riders (the “free riders” in this case are the other payers who have members being treated by the same providers and who can therefore share in any improvements). Two deals last week suggest a case study of the concept may be developing in southeastern Wisconsin: On September 9, Anthem announced that it will be teaming up with highly ranked

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ACO proliferation and provider “all-payer” care models inexorably lead to tighter network strategies

A new study in JAMA (by McWilliams et al.) looks at the Medicare expenditures of patients seeing providers enrolled in the BCBS of Massachusetts version of the ACO (Alternative Quality Contract or “AQC”). The AQC model covers only commercial lives and all of the relevant providers had FFS reimbursement from Medicare during the time of the study (several later became ACO Pioneers). The study tests whether providers rewarded to be more efficient for one pool of patients (BCBCMA commercial HMO lives) will take the same approach to care with other

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