Blog and Whitepapers

Recon takes an analytical look behind select developments in healthcare

NEJM Highlights October 2015: what to do, how to do it, and to whom

What are annual physicals for? Annual physicals are costly (~$10 billion annually) and have never been shown to improve outcomes, but people value them. In this dichotomy lies a lot of the inner tensions of medical care: between delivery of technical care, and nurturing of human relationships, and those are illuminated by two articles in counterpoint.  In the end though both sides come to a point of view that is not altogether dissimilar – that what is needed is not an annual physical, but some sort of preventive care/health review

Read More

Convenience care, telemedicine and breaking down barriers to geographic competition – a speculation

A few problems Geographic barriers to the entry have long protected providers from best-in-class competition.  Provider consolidation – theoretically a logical response to the current operating environment — reinforces these barriers by locking up referrals and making systems too big / too few to fail.  Instead of pushing providers aggressively on value, payers and regulators may end up nursing underperforming systems (e.g. Highmark’s bail-out of the West Penn Allegheny system) and discouraging disruptive entrants for fear of unintended damage to the stability of the local provider infrastructure.  Even if consolidation is

Read More

Working paper: the coming age of algorithmic medicine

Summary In this working paper, we develop the following thesis. In the not so distant future (a decade or two), medicine will be largely governed by algorithms — highly deterministic clinical pathways characterized by a high level of reproducibility of care — that will be developed and improved by providers. These algorithms will include individual patient preference branch-points but not individual provider preference.  As a result, payers and providers will agree on coverage on the basis of a set of algorithms and a process of how they should evolve; providers

Read More

The Ochsner Health Network: has Ochsner gone “a hospital too far”?

Over eight months between October 2014 and June of this year, Ochsner formalized alliances with five major provider systems in Louisiana. The first wave (with St. Tammany Parish, Terrebonne and Slidell) reinforced Ochsner’s stronghold in New Orleans. The second wave (with Lafayette General and CHRISTUS) secured pathways to markets west along I-10 and the coast and northwest along the I-49 corridor to Shreveport. This collection of alliances — dubbed the Ochsner Health Network (OHN) — is effectively statewide with ~30% of the hospital beds and ~30% of the physicians. Key

Read More

NEJM Highlights September 2015: cells, cells, cells

Promise for systemic amyloidosis (and beyond?) Systemic amyloidosis is an uncommon disease in which abnormal cells (typically antibody-producing B cells) produce large amounts of protein that deposit as amyloid fibrils in various organs (heart, kidney, liver). These are the same kind of deposits that create plaque in the brain in Alzheimer’s disease.  In systemic amyloidosis, the deposits cause organ damage, failure, and death and treatment options are limited.  GSK is developing a monoclonal antibody directed at serum amyloid P (SAP), a naturally occurring glycoprotein that binds to amyloid fibrils. The

Read More

Can convenience care be a platform for an insurance product?

Summary A Portland-based urgent care operator is launching a health plan from scratch The strategy targets the busy and healthy with the convenience of a retail network providing “store brand care”; a simple, consumer oriented service model at low cost. Carving out this segment can plausibly allow for sustained advantage in admin, medical cost and revenue management. The plan has hit a speed bump with regulators on pricing, so evidence of this model’s market appeal will come slowly. Convenience care has historically played nice with the ecosystem, but Oscar’s explosive

Read More

NEJM Highlights August 2015: cancer and joints

The emergence of a new approach to drug development in cancer Cancers are classified by the organ or tissue from which they arise, but as our molecular understanding increases, another level of categorization is emerging based on the molecular characteristics of the tumor. In a novel but sure to be growing approach, Roche/Genentech tested their drug vemurafenib (Zelboraf, currently approved for melanomas with the BRAF V600 mutation) in a study population that was largely agnostic to tumor provenance as long as it was BRAF V600 positive. 122 patients were enrolled

Read More

So what if PCPs in ACO practices are not paid differently?

In a recent study, Ryan, Shortell, et al analyzed the composition of PCP compensation (broken down into salary, productivity and quality/other components) across practices with ACO contracts vs. those with more traditional business models.   This note will: provide a quick summary of results offer an alternative interpretation of the data describe two methodological points regarding the data set The major finding As of 2012/2013, there are no major systematic differences in how PCPS are paid in ACO practices vs. others.  Whether in an ACO or not, PCPs were paid on

Read More

NEJM Highlights July 2015: a first in class drug for cancer, Sovaldi cures renal failure too (sometimes), convenient primary care

Palbociclib – first to target cyclin dependent kinases – breast cancer As all biology majors know, cyclin dependent kinases are critical elements controlling the machinery of cell proliferation.  They have proved difficult targets due to their ubiquitous activity in both normal and abnormal tissue – until now. In a phase 3 study, about 500 patients with metastatic hormone positive, Her2 negative breast cancer were treated with palbociclib (Ibrance, Pfizer, recently FDA approved) vs. placebo.  The median disease progression time for patients on drug was 5 months longer than for placebo

Read More

NEJM Highlights for June 2015: the flavor of the month is distinctly cardiovascular

Interventionalist treatment for stroke: In the 80s and 90s, treatment of myocardial infraction was greatly advanced by the introduction of systemic clot busting drugs (t-PA and others); further advance occurred in the 90s when it was shown that immediate cardiac catheterization produced even better results. Acute embolic stroke has followed the same path – in the 90s, it was shown that t-PA treatment within 3 hours of onset of symptoms was beneficial, and ever since there has been a move toward treatment modalities where an interventional radiologist acts on the

Read More

NEJM Highlights May 2015: a read on ACO performance, progress in cystic fibrosis treatment, yes developing new drugs is expensive, rethinking industry-medicine relationships, CVS Caremark and smoking cessation

Early results of the ACO experiment: directionally right, but impact is still small In this study, the authors compare metrics for Medicare beneficiaries assigned to the 32 ACOs part of the Pioneer program vs. matched beneficiaries who were not in an ACO.  With respect to costs, they find that compared to contemporaneous trends observed in non-ACO members, the ACO beneficiaries yearly spending was approximately $100 below trend (a 1% savings). In a hint of a reversal of a secular trend in health care, office spending visit expenditure increased more in

Read More

NEJM Highlights April 2015

The rise, fall, and rebirth of the Chinese healthcare system A fascinating account of the evolution of the Chinese healthcare system which almost seems to be an upside-down picture of the rest of the country’s development. Tremendous public health improvements occurred in the 50s, 60s, and 70s but the transition to a free market model of healthcare in the 80s seems to have been a disaster only mitigated by the general increase in wealth of the population. Seeing this as a major threat to social stability, the Chinese government has been

Read More

Comparing the emerging national networks of Cleveland Clinic and Mayo Clinic

The build-out of the Cleveland Clinic and Mayo branded networks continues apace. Most recently, the Virginia Hospital Center joined the Mayo Clinic Care Network in March and Sequoia Hospital (Dignity), Piedmont Healthcare and Valley Health System (NJ) signed up with Cleveland Clinic this past March and early April. Growth of the networks and current snapshot These four deals cap torrid growth in the networks especially in 2013 and 2014. As of the end of the first quarter of 2015, Mayo has affiliations with systems totaling 13.4K beds (and a rough

Read More

NEJM Highlights March 2015: Progress against Crohn’s, PCSK9 inhibitors coming through, comparative effectiveness for diabetic macular edema, Eric Lander encourages the FDA on genomic testing regulation

A promising agent for Crohn’s Disease, a miserable illness Crohn’s is an inflammatory bowel disease that is notoriously unpredictable; flares can affect any part of the digestive tract and lead to grave complications. In this double-blind phase 2 study, patients were dosed with mongersen (licensed by Celgene) an anti-sense oligonucleotide that down-regulates the expression of a protein implicated in the inflammatory cascade. In general these classes of medications have to be given parenterally but in this case the target is the gut so it can be taken orally. At two weeks

Read More

A sizeable step forward but miles still to go: CMS’ Next Generation ACO model

CMS has issued a “Request for Applications” describing its Next Generation (NG) ACO. The model makes progress on three issues that have generated plenty of analytical handwringing from MedPAC and the broader ACO community. It also signals a strategy to set ACOs up to compete more directly with Medicare Advantage (MA). (1) Enhancing predictability The Medicare Shared Savings Program (MSSP) and Pioneer ACO models had different approaches to solving the same business parameters. With NG, CMS has generally picked the ones which enhance simplicity and predictability (see table). For example,

Read More

Biopharma innovation: Will there be sufficient incentives in the future?

Ezekiel Emanuel wrote an op-ed in the New York Times last month, which highlighted the low number of new antibiotics that have been brought to market in the past two decades. Antibiotics are a unique market compared to therapeutics for other diseases. Infectious disease clinicians prefer to use innovative new products as a last line of defense against highly resistant infections, relying on tried-and-true antibiotics as their primary options. Paradoxically, the “reward” for being a highly innovative, effective new antibiotic is to be sparsely used. Emanuel points out this conundrum while

Read More

NEJM Highlights February 2015: the most boring month in my NEJM reading memory

Our selection from a month with relatively few exciting articles – perhaps this long Boston winter has us all down. Precious metals and health plan buying: The implementation of the ACA has placed new decision making on individuals purchasing health insurance on the exchanges. In this report, the authors argue based on experiments that for many individuals, reversing the gold-silver-bronze nomenclature (gold becomes bronze and vice versa) reverses the preference independently of the underlying characteristics of the plans. For the public health advocate this highlights the need for educating shoppers, and

Read More

NEJM Highlights January 2015: Dengue vaccine, Informed consent, Cancer drugs and Tiering for selection

A vaccine for dengue finally nears the market Dengue is a mosquito transmitted viral infection that is often severe and occasionally fatal, and that has been identified as a growing public health threat, largely in the developing world but also with inroads in developed countries with hundreds of millions of cases yearly world-wide. At this time, there is no vaccine or treatment for dengue other than supportive care. In a placebo-controlled study, a dengue vaccine from Sanofi-Pasteur covering all 4 serotypes of dengue was found to be 60% efficacious in preventing

Read More

Cosgrove moves south: competitive implications of the formation of the Midwest Health Collaborative

A few days ago, Cleveland Clinic announced the formation of the Midwest Health Collaborative (“the Collaborative”), a new company jointly managed by six Ohio delivery systems across the state. The company’s goals are to share best practices, collaborate to reduce costs (e.g., procurement synergies) and “explore the business case” for developing a state-wide provider network. Notably, the deal was announced just eighteen months after Cleveland Clinic’s key competitor in Ohio, Mercy Health (formerly Catholic Health Partners), announced its own state-wide alliance, Health Innovations Ohio; this new deal also links three

Read More

Shifting lines in the mobile health competitive battlefield: Aetna makes a strategic retreat while United digs in?

The battle to own healthcare’s consumer relationship is being nowhere fought more intensely than in the mobile arena. Tea leaves suggest that Aetna has pulled back from trying to own this relationship in favor of a more collaborative “ecosystem” strategy, but United appears determined to lead. The thinking is speculative but I let me point out the emerging evidence and offer some guesses on what will come next. Strategy environment for consumer mobile health At the risk of oversimplification, let me offer six hypotheses regarding the strategic context for consumer

Read More

The “weaponization” of ACO narrow networks: Strategic destabilizers which compel their own replication?

In theory, narrow networks built around a single provider or a network of aligned providers (“provider-orchestrated narrow networks” or “ACO networks”) can pose a much higher stakes threat to non-participating providers than ones assembled solely by payers (i.e., where the payer picks who is in based on cost and rates): They are more likely to achieve broad utilization reduction because participating providers can align on principles, build shared capabilities and coordinate management of specific patients consistently. As a result, discounts can play a smaller role in creating a compelling value

Read More

Ochsner and River Parishes: one type of endgame for managing redundant hospital capacity (updated)

Please see update at end of post. If value-based care broadly delivers on its promise to reduce hospital admissions by providing more timely ambulatory care, a lot of today’s bed capacity will end up redundant and stranded. How can we navigate to a new equilibrium? Recent developments in the New Orleans area (whose population size still has not recovered from Katrina and is potentially therefore a model case of oversupply) may offer some window into future endgames for resolving the supply-demand imbalance. Acquire, unbundle, and selectively shut-down One approach is

Read More

Boeing’s model for creating product-based competition among providers

Summary Boeing is creating a benefit design model which sets up providers to compete for their book of lives via provider-branded narrow networks By offering a choice among competing narrow and full network products, the model may make narrow networks more palatable for employees Narrow networks can produce a volume windfall for providers (e.g., share gain, leakage reduction) and profits from better care management and a risk deal  Providers “pay” for the narrow network opportunity by being lower cost (often via incremental discounts) in hopes that these gains outweigh cannibalization

Read More

Apple HealthKit, provider partnerships and walled gardens: three observations

A number of observers have noted that the Apple’s partnership with Epic on HealthKit could reinforce the role of “closed IT system” strategies in general and Epic’s leading position among EMR vendors in particular. Others have noted that prominent PHR failures (Google, Revolution Health) should add some sobriety to the hype around HealthKit. While I don’t disagree with these concerns, I have three other thoughts on the announcement that Apple has built a framework for collecting and presenting health data from a wide variety of consumer devices and apps. Providers

Read More

Can drug companies make drugs, AND money?

In this morning’s New York Times (June 3,2014), Andrew Ross Sorkin asks,“DO drug companies make drugs, OR money”? That’s a fair question in the context of what I’ll call a “fee-for-product” reimbursement regime. Another way to look at this question is, “CAN drug companies make drugs, AND money”? Value has not been an easy sell As the U.S. healthcare services system moves from fee-for-service to a value-based system, the biotech and pharmaceutical (biopharma) industry should have an opportunity to capture more of the value it creates. But with drug costs only ~10%

Read More

Aetna not conceding the private exchange space to the benefits consultants

Summary Aetna is stitching its inventory of ACO deals into a national ACO network and will offer them on its proprietary private exchange (PHIX) Linking ACOs and PHIXs is smart because PHIX’s defined contribution feature creates a strong consumer reward for picking a tighter network product Promising a national network of ACOs is bold: ACO deals depend on willing providers and opportunity in local care patterns; in many geographies, the delivery system isn’t ready or interested. If Aetna can create a national network, it should be attractive to major employers

Read More

Boiling the Ocean…or not

We’ve all heard the term, “Boiling the Ocean” to refer to an approach that is broad and ambitious and generally leads to lots of work and very little insight.  Historians will argue about whether it was Will Rogers or Mark Twain or someone else who first used this phrase but that’s besides the point. As the story goes: In 1914 the Germans were sinking U.S. ships in the North Atlantic. It was a turkey shoot because the Germans had the U-boat and we didn’t. Somebody asked the American folk philosopher

Read More

MA hospital relative prices by payer

Here’s a quick look at relative prices in MA using CHIA data for you to play with. What you could do for instance is select Commercial and Medicare on the left (use CTRL key for multiple selection) and then on the right, check off say only BCBS. That wold show you the difference between TMEs for Medicare and Commercial just for BCBS. Can also filter by hospital system (on the right). Have fun. P.S. You may need to scroll to the right or re-size on your browser (CTRL -) to

Read More

Bring it on: Highmark brings in a long-distance ally to help compete vs. UPMC in cancer care

Summary Allegheny Health Network (AHN), the major delivery system in Pittsburgh owned by Highmark, and Johns Hopkins Medicine have signed a MOU to create an affiliation between Allegheny and the Johns Hopkins Kimmel Cancer Center.  Over many years, UPMC has established a very large network of cancer care throughout western Pennsylvania; AHN has responded in kind albeit much less broadly. At this point, there is very little independent cancer care left in the region. By partnering with a prominent UPMC competitor in oncology, the deal is likely designed to shore

Read More

Cigna and Samsung: assembling a “global account”-based business model for mobile

Samsung and Cigna have agreed to a multi-year development alliance for health applications for the Samsung smartphone. The partners will initially focus on content (access to the health-related tips and articles Cigna already offers its customer base). Ultimately, the partnership will “connect individuals with caregivers, doctors and hospitals to improve health and wellness globally.” So far, the announcements have been silent on any exclusivity. In our view, the content deal is a sideshow: health and wellness tips are highly commoditized and an insurer an undifferentiated supplier for this content. I

Read More

Staked out territory by Massachusetts hospital systems

In 2011, we would tell our payer clients (tongue firmly ensconced in cheek) that the answer to all questions was “private exchanges.” In 2012, the punchline changed to “narrow networks.” In 2013, what is not a joke is that payers and health systems are really having to grapple with difficult strategic choices on partnerships, affiliations and M&A relating to facilities and medical groups in order to actually deliver on the value promise of narrow networks (higher value care).Two key inputs into these choices are: The geographic catchment area of each

Read More

Marrying into the right family: the bets underlying United’s revenue cycle management joint venture with Dignity Health

Market for outsourced revenue cycle management could be big The revenue cycle management (RCM) vendor industry is about $2.0B for hospitals and $11 billion for physicians today. The market is constrained because most providers do their own RCM. Vendors only have a ~10% penetration among hospitals and a 25% penetration among physicians (implying that the potential combined hospital and physician market is $60-70B). However, RCM as a function is getting more complex and outsourcing could quickly start looking more attractive: Value-based contracting models raising the stakes in documentation, reporting, benchmarking,

Read More

Declining value of the EMR walled garden? An emerging signpost from Cleveland Clinic

Quick follow-up to our post about the Epic-eClinicalWorks deal: Today’s Healthcare Informatics has an interview with Martin Harrison, CIO of Cleveland Clinic, was asked what is the biggest strategic IT challenge right now. His answer? The challenge element is partly being driven by the complexity of the challenges in this value-driven world. So all the care providers belonging to this collaborative probably will not belong to the same organization. So the biggest challenge to my mind right now is the effectiveness of interoperability. We talk about it a lot, but

Read More

Change in tactics or change of heart? Speculations on the eClinicalWorks–Epic interoperability announcement

Epic is famous for its intense focus on interoperability across its own systems coupled with its conservatism regarding interoperability with other EMRs. In 2012, KLAS said Epic has the “deepest data sharing of all the vendors” across its own practice and hospital EMRs (see this example in which Cleveland Clinic and neighboring system MetroHealth — both on Epic — have put interoperability in place). But when it comes to non-Epic systems, customers must work through defined “exits” to the Epic system (“we don’t let anyone write on top of our

Read More

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

Read More

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

Read More

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

Read More

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

Read More

Making flanks something for the enemy to worry about: the Cleveland Clinic-Promedica deal and the emerging battle for northern Ohio

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

Read More

Could the Employer Mandate lead to reduced coverage?

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

Read More

Ambidextrous strategy: PART 2 – Scenario Implications

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

Read More

Ambidextrous strategy: PART 1 – Payer and provider strategy for two very different worlds

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 clear trends. More

Read More

Could a delay in the employer mandate be a boost to government run exchanges?

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

Read More

When do you know ACOs are here to stay?

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

Read More

Cleveland Clinic’s bold land grab in care improvement: the Community Health Systems deal

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

Read More

Risk-taking providers in private exchanges: Medica’s “My Plan” private exchange

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

Read More

Getting the troubled Highmark-West Penn relationship back on track: an outside-in speculation

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.

Read More

Romance of convenience: perspectives on the IASIS-Aurora joint venture

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

Read More

Deploying analytics in a healthcare world flooded with data

We live in a society with too much data. In the field of market research, the deluge of data is cited as one of the top challenges leaders face as they search for actionable insights hidden in the data. Healthcare is no different. Information content increases with the amount of data that surrounds us, but so too does the noise. And, unfortunately, noise often overwhelms and obscures information as the volume of data grows. Add to that the operational issues we introduce in managing the flood of data, and we

Read More

Readmissions rate fallacy

Today’s piece in Kaiser Health News that hospitals’ readmissions rates are flat appears to suggest various ongoing efforts to cut readmissions are failing and failing badly. According to the Medicare data used by Kaiser, the readmission rate for heart failure was 24.8% in 2008-10 and 24.7% in 2009-11 giving us the 0.1% decline cited by Kaiser. Comparing 2011 to 2008, this is a 0.3% difference, still not sufficient to convince us that there is a real change. But don’t write off those efforts yet as there may be a silver

Read More