CASE STUDY
Product strategy
Strategic partnership between payer and provider creates opportunity for product innovation
A health plan leading the nation in quality and outcomes began engaging a leading non-profit academic system in one of its markets with a history of VBC innovation on potential partnership opportunities. Both faced strong competition from nationally scaled, for-profit competitors in their respective domains. Across the two partners, there was strong alignment on priorities and cultural fit. However, the potential areas of collaboration were many, the business case diffuse and the energy behind the negotiations flagging in the face of ambiguous business value.
Tightly orchestrated joint workgroup with "strike team" analytical support
We organized a joint working team led by 2 C-levels from each partner and several key SMEs meeting on a weekly basis through the summer. We reviewed, prioritized and sequenced an overall alliance agenda based on high-level business opportunity sizing. We then initially focused on a joint venture for insurance products with the academic system at the center of the network and with a benefit design supportive of high quality and value-based care including the definition of product designs, network, economics and marketing strategy. Our firm provided analytical support on sensitive economic questions, incorporating data from both parties into an common model while preserving confidentiality for both sides. We also acted as an honest broker, identifying key issues, transparently laying out conflicts and identifying paths towards win-wins and horse trade deals.
A new joint venture and a new set of products to compete vs. dominant, nationally scaled plan
The negotiation successfully concluded with the formation of a joint venture and the launch of new, jointly branded products to great market acclaim. While the narrow network products took time to gain material traction, both parties were able to test and scale innovations such as tight integration of behavioral health support and innovative clinician incentives which could be subsequently scaled into their respect core businesses. The joint venture was also able to build several subsidiary businesses which sold services to other payers and providers interested in tapping into the value-based care innovations.
SECTOR
Payers