Recon Strategy

Blog and Whitepapers

Recon takes an analytical look behind select developments in healthcare

Survivorship Is Expanding Cancer Care — How Are Oncology Providers Responding?

Survivorship care is increasingly pivotal to cancer care delivery and system capacity By 2040, 26.1 million Americans will be cancer survivors, representing ~7% of the nation.[1]  This is prompting na…
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AJMC: More frequent visits to primary care can save net $30-40 PMPM for top 20% highest risk commercial members

A new AJMC study from consulting firm Recon Strategy is the first to show how advanced primary care techniques, previously proven in older Medicare populations, could also deliver substantial savings …
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AJMC: More Frequent Visits to Primary Care Can Save Net $30-40 PMPM for Top 20% Highest Risk Commercial Members

More frequent routine primary care visits for certain higher-risk commercially insured adults are associated with lower net population-level health care costs.…
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Kidney transplantation, improved but still a significant missed opportunity

In February 2025, the FDA gave IND approval to United Therapeutics for the first xenotransplantation clinical trial, which followed a series of high-profile transplants via the compassionate use pathw…
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Walmart Health didn’t test the opportunity in rural underserved markets

What lessons can be drawn from Walmart’s precipitous shut down of its attempt to launch primary care, dental and behavioral health services?  The Walmart Health management team (after some mid-stream …
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Are some of Kaiser’s regional ambitions starting to pay off?

PDF: Are some of Kaiser’s regional ambitions starting to pay off? We have produced a new study evaluating developments in Kaiser's regions (outside of California). The report provides an explanation f…
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What should school nurses do (and not do)? A call for further research

About the author: Alyssa Idusuyi is currently a high school senior attending Miss Porter's School (Connecticut). She spent the summer of 2022 with Recon Strategy as a paid intern assigned a project to…
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What’s so special about One Medical in the eyes of Amazon? A few quick thoughts

There isn’t a bricks-and-mortar primary care acquisition out there that is beyond Amazon’s financial reach.  While the announcement regarding One Medical has provoked fresh rounds of speculation about…
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The coming site-of-care shock for infusions

There’s a major disruption looming in how the site-of-care for infusions is managed which will have repercussions for plan competition, delivery system economics, PE hunting for healthcare opportunity…
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The ongoing physician affiliation land grab in Pennsylvania’s Capital District

Closed vs. open Hospitals can compete for patient referrals either by exclusively affiliating with a subset of physicians (“closed model”) or by collaborating with as many qualified physicians as poss…
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Optum opening new competitive terrain in Revenue Cycle Management

What is revenue cycle management? Revenue cycle management (RCM) is the process of converting care delivery into cash. At its most comprehensive, services include: patient intake (scheduling/registra…
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Profit engine swap-outs: How UPMC sustained itself after the Highmark decoupling

UPMC’s decoupling from Highmark exposed a critical vulnerability: economic dependence on its Allegheny County hospitals. In FY11-12,[1] these hospitals provided 70% of UPMC’s overall operating margin,…
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The Puzzling Future of Healthcare

This post is from a talk at the 2021 Link Ventures CEO summit. Original talk:
Transcript: The practice of medicine has always been an information problem. Clin…
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Iora Agonistes: High-touch primary care in Medicare Advantage is no sure bet after all

Iora Health was one of the original primary care transformers offering a clinically capable, engagement-focused, and accountability-grounded care model.  After an initial foray into commercial, Iora p…
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Four plausible rationales for incumbent hospitals to embrace hospital@home despite the potential to divert “heads from beds”

We identify four different business strategy rationales for hospital@home depending on each hospital’s specific market situation and each with clear predictive implications for local markets.  These a…
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WMT’s MeMD acquisition: too small a play to make the difference

Last week, WMT acquired MeMD, a virtual provider in Arizona. Per the press release, MeMD will “allow Walmart Health to provide access to virtual care across the nation including urgent, behavioral and…
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How much are Humana’s value-based care models really taking out of utilization?

All that effort for only 0.4% savings Since 2014, HUM has reported on the performance of primary care in value-based arrangements (“VBA”) vs. traditional contracts (“non-VBA”)[1] in Medicare Advantage…
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Walmart Health: Will the fifth attempt at clinics be the charm?

Eighteen months ago, WMT opened its first Walmart Health clinic attached to a supercenter in Dallas, GA.  The operation combined multiple services – primary/urgent care, dentistry, behavioral health, …
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How does OptumCare manage its physician staffing once the big deals are done?

OptumCare’s acquisitions usually make headlines.  But what happens when the reporters leave? How is clinical capacity managed? What role do micro-acquisitions, recruiting and retirements play in advan…
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A tale of two cities: Referral networks of orthopedic surgeons in Miami and Seattle

Summary: We conducted a comparative analysis of the referral networks of orthopedic surgeons in King County (the area around Seattle, WA) and Miami-Dade County. Similarities Bigger systems are better…
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AI in healthcare III: COVID-19 applications and implications

COVID-19 has accelerated the adoption of AI in healthcare. AI based tools and solutions can work quickly, be deployed at scale, and respond to the dynamic nature of the crisis. Use-cases span all face…
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Buying kit for a leadership position in the @Home revolution? Implications of Optum’s acquisition of naviHealth

Summary NaviHealth is a leader in post-acute care management; since it manages but does not provide care, its impact is constrained by quality of available providers By aligning with Optum clinical a…
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Covid’s backhand blow: payer mix degradation and the threat of renewed payer/provider rate brawls

Among Covid’s many repercussions, the recession shock will drive a sustained degradation of provider payer mix.  I estimate that each 5% added to unemployment will incrementally reduce hospital[1] ope…
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Medicare Advantage’s durable – but underexplained – post-acute care advantage

Health Affairs has put out another study – this one by Skopec and team (subscription access) - comparing post-acute care (PAC) among Medicare Advantage (MA) vs. traditional Medicare (FFS). And, once a…
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Strategy in the Time of Covid

Preamble A recent post from Recon Strategy outlined the longer-term strategic implications of Covid-19 on 12 healthcare sectors. This post highlights the opportunity to redeploy corporate strategy ass…
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The day after: Implications for hospitals, payers, biotech and more…

Even as our priority today is dealing with the Covid crisis, healthcare organizations would do well to start thinking about the longer-term implications for their strategies. In some instances the mar…
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Bolting a full-risk engine onto an urgent care chassis in New York

Last month, Warburg Pincus closed on previously announced plans to acquire a major multi-specialty practice in northern New Jersey (Summit) and combine it with an urgent care network centered in the N…
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Choosing your customers wisely: are hospitals the right place to engineer the future of healthcare (and the software services to support it)?

MSFT’s pathbreaking alliances in healthcare services are impressive and well designed to grow adoption of their Azure cloud over the medium term.  But if MSFT wants to be at the forefront of change an…
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Full-service vs. self-service: an emerging bifurcation in healthcare

A clinical vignette: the cases of Jane and Joe Imagine if you will two individuals both at age 50. Jane is a project manager whose recent health care has focused on managing menopausal symptoms, a kn…
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Facing new vertically integrated competitors, WellSpan and Capital Blue Cross prepare for a long siege

Summary The Capital Region of Pennsylvania is shifting in “real time” from traditionally separate plan vs. plan competition and provider vs. provider competition to integrated vertical plan/provider …
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OptumCare’s legacy entanglements could slow its site-of-service shift

By bringing together accountable-minded physicians, urgent care and ambulatory surgery centers (ASCs) on a national scale, OptumCare could prevent a lot of avoidable hospital care and move much of wha…
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There’s always a bigger fish: healthcare services giants are looking anxiously over their shoulders

With the closing of the CVS/AET and CI/ESRX combinations, healthcare services are now led by a triumvirate of vertically-oriented goliaths. And we can anticipate that there will be more care delivery …
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Consider this speculative scenario on WMT-HUM: nibbling at the bottom and taking a slice off the top of the healthcare delivery pyramid

WMT is in talks with HUM about a relationship enhancement, possibly an acquisition. The two already know how to work together in alliances (narrow pharmacy network, marketing collaborations, points pr…
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United’s Medicare Advantage footprint and OptumCare network do not overlap much (so far)

United’s OptumCare promises a lot of value for health plans.  An integrated system supported by Optum technology should be able to deliver consistent, analytically sophisticated care.  Its ambulatory-…
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What precisely lies behind UPMC’s $2B investment in three new specialty hospitals?

Last December, UPMC announced plans to spend $2B on three new specialty hospitals in downtown Pittsburgh. Each will abut an existing UPMC hospital currently serving as system center of excellence for …
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Consider this speculative Amazon scenario in your strategic planning

Amazon has many puzzled about its plans for healthcare. Arguably, Amazon is just as puzzled, but is – in effect -- running a massive Delphi process to sort out the plan. Amazon is, after all, the Brea…
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How can Optum be in only 35 out of 75 target markets while also being available to 70%+ of the US population? An analytical speculation

During the UnitedHealth quarterly earnings call earlier this month, Larry Renfro, CEO of Optum, offered some additional color on the growth of OptumCare: “Combined with [Davita], OptumCare will be in …
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The UPMC/Highmark brawl spills into Philadelphia’s backyard – what happens next?

(For background on Pennsylvania market, please take a look at previous note here) Summary The UPMC/Highmark rivalry continues to open new fronts in Pennsylvania Highmark’s response to UPMC is differe…
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Ochsner signs LOI to enter northern Louisiana and secure a medical school affiliation

(For Louisiana market context, please take a look at previous notes on Ochsner here and here) Before the holidays, Ochsner signed an LOI to take over the management of ailing University Health located…
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With the DaVita Medical Group acquisition, OptumHealth deepens its presence in existing markets rather than adding new ones

OptumHealth and its proposed acquisition target DaVita Medical Group (DMG) have a lot in common: Ambulatory care portfolios: physician practices, urgent care centers and ambulatory surgical centers (…
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United’s ambulatory delivery system OptumCare can reach 70% of the US population

Who will be the first to take integrated health care delivery national? A few years ago, the best bet might have been an established provider with a nationally compelling brand and a growing affiliate…
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Allegheny Health Network adds micro-hospitals to its ground game

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) c…
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Marrying into the right family pays off! Update on revenue cycle management joint venturing

Back in 2013, Dignity and Optum formed a joint venture for revenue cycle management (RCM) services named Optum360. Dignity contributed processing centers and 1,700 employees in return for ~25% share i…
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UPMC’s race to the sea and the tentative steps towards Highmark-Geisinger alliance

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 liv…
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Urgent care gets drawn into system-level market share battles in the Big Apple

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 s…
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An ad page in the NEJM and the future of cancer care

I am not sure how many docs continue to do this, but I still read the actual hard copy of my NEJM, and that means I flip past ad pages with smiling grandfathers playing with grandchildren thanks to su…
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Rapid cycling to get medications right: a potential use case for coupling wireless patient monitoring with remote support?

Summary Cheap home devices are starting to generate a flood of high frequency, low latency biometric data, much of it of uncertain clinical value This uncertainty makes designing the service model di…
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The many ways in which decreasing volatility in individual health care utilization is valuable

It is a long-standing hypothesis shared by many providers that community-based interventions that improve primary care could lead to overall healthcare savings by preventing (or delaying) the occurren…
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Ochsner solidifies its position in northern Louisiana (updated)

Please see update at the end of the post. With new two affiliations, Ochsner Health has solidified its clinically integrated network in the most populous parish (East Baton Rouge) and built a beachhea…
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Biopharma risk-sharing: what needs to happen

A couple of years ago, we addressed the question of whether drug companies could use new business models to capture more of the value they create. At the time, we pointed out that drug makers had stru…
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Context is King – When to use an Agile corporate strategy?

“Agile corporate strategy” (as defined in a previous post) is already the established the weapon of choice for small, early-stage innovators trying to re-invent their marketplace, where the product is…
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Mercy Health exits the insurance business and curtails ambitions for its state-wide provider alliance

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, diss…
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Rewarding patient loyalty vs. earning patient loyalty

A new article in JAMA recommends that ACOs and health systems develop patient loyalty programs comparable to those offered by coffee shops, hotels and airlines (McMahon et al, "Health System Loyalty P…
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Centene bringing a new managed care strategy to The Big House?

Correctional health and correctional pharmacy 2.2M people are incarcerated in local jails and state and federal prisons at any one time in the U.S. for whose healthcare various government agencies are…
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The Walgreens-Advocate deal: end of urgent care’s strategic neutrality in Chicago?

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…
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Observations on NextGen ACO’s first cohort of participants

Earlier this month, CMS announced the first cohort of Next Generation ACO (“NGACO”) providers (see here our summary of the key changes made in the Next Generation). Below are a few thoughts on who sig…
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Outcomes patients want: Could it be that the more common the condition, the worse doctors understand the outcomes patients seek?

Leif Solberg and team published research last month contrasting how patients value outcomes vs. how physicians think patients value outcomes. The approach was novel: they asked patients! They identifi…
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Emails substituting for visits: Evidence points to “yes” but providers need to answer a lot of emails to replace a single visit

Earlier this month, researchers released a study of patient-initiated emails to providers with Northern California Kaiser Permanente (KPNC) in 2011/12 in the JAMC . The study focused on patients with …
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Ohio’s Mercy-Summa alliance grows contracting teeth

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 j…
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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 enviro…
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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 pathway…
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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 Slidel…
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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”; …
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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…
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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…
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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 th…
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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 co…
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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-part…
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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 …
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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 …
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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 …
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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 whet…
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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) an…
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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 John…
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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…
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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 constra…
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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 …
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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…
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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 compe…
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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 Innovatio…
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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 ri…
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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 “AQ…
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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 optio…
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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 coordina…
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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 ado…
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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 …
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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 ch…
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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 p…
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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 Highmar…
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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 a…
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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 …
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Rescuing the condition-focused ACO from CMS

Summary The case for an oncology ACO can be compelling but CMS rules for ACOs within fee-for-service (FFS) make value difficult to demonstrate A new physician-hospital-payer partnership in Florida …
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Transitioning from patchwork to quilt: NY and PA’s path to integrating HIEs at the state level

Last month, NY and PA announced plans for how they will integrate data sharing across local HIEs. The state planning efforts share some key parameters: Roughly equal funding with about $20 million i…
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Heartland Health: Marching towards Kansas City with Mayo on its shoulder

Earlier this month, Heartland Health signed a deal with the Mayo Clinic for its doctors to virtually consult cases with Mayo physicians in return for an undisclosed fee. Heartland Health is a reg…
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Franchising specialties: model for breaking down geographic barriers to competition?

Summary Geographic barriers to provider competition are a headache for payers By importing capabilities, specialty franchising could help reduce some of the barriers to cross-geography competition It…
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Home health’s LHC Group decoupling from the stock market: where is it going next?

The PE firm TPG is reportedly considering investing in LHC, a publicly-held home health agency (LHC announced earlier this year they were exploring strategic options). PE funding could allow LHC to p…
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Lumeris, NaviNet and the emerging battle for cloud-based ACO enablement

Summary Administrative clearinghouse NaviNet has been acquired by 3 Blues plans and a provider of analytics capabilities for plans and providers (Lumeris).  Both NaviNet and Lumeris appear to ne…
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Compete by creating more competitors: the Heartland Health deal and Aetna’s strategic jiu jitsu

Yesterday, Aetna announced a deal with Heartland Health (an integrated delivery system serving northwest Missouri, northeast Kansas and southeast Nebraska) to create a new health plan for the small gr…
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Aetna and Best Buy: a new twist on retail in healthcare

Aetna has struck a deal with Best Buy to sell four online coaching programs (fitness, weight management, smoking cessation and stress management) in new 1,200 sq. ft. “health technology departments” i…
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“Savings illusion” can become savings reality in the long haul: baby boomers to the rescue

A recent article in the NEJM argues that cost savings from quality improvements are illusory because of the lumpy nature of healthcare capacity.  Quality’s impact on utilization is just too small…
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