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”; …
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 categ…
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…
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…
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 advanc…
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 pr…
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 …
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…
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 gra…
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…
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 …
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 …
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 thre…
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…
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 relationshi…
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…
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 …
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 …
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 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" reimbursem…
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…
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…
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…
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…
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 …
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…
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…
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 …
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…
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…
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…
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…
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…
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…
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 re…
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…
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…
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…
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 …
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…
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…
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…
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…
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 dat…
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 …
Summary
HIV Special Needs Plans (SNPs) offer extra layers of services specialized for the HIV/AIDS patient and can generate attractive savings particularly in reduced in-patient costs
A new par…
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 …
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…
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…
BCBSMN has licensed the platform for its private health insurance exchange (PHIX) and defined contribution product from eHealth (original announcement April 30). For eHealth, which has seen its gover…
With its acquisition of Extend Health, Towers Watson has ensured that (1) PHIXs will be a key competitive arena among the major benefits consultants and (2) that it has taken the lead. Extend Health…
Last week, CIGNA acquired the Great American Supplemental Benefits from American Financial Group (AFG) for $295M in cash. Per press releases, the key financials for the acquired business are:
A f…
Summary
Aetna has struck a deal to sell individual health insurance with Costco, the #6 retailer. The deal targets 9 populous states first with more to follow in 2012
While the deal lacks some…
There have been some blog posts (here and here) about a discussion on payment reform at the Massachusetts Health Data Consortium last week. While I did not attend, the commentary is provocative and I…
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…
Next week, the California insurance commissioner will propose legislation to deter small employers from exiting the traditional health insurance market and going self-insured. The legislation will pu…
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…
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…
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…
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…
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…
Several recent acquisitions suggest a rapidly growing valuation on Medicare Advantage (MA) lives. Last August, Healthspring paid about $3.6K per adjusted MA life with its acquisition of Bravo. (My …
UPDATE: United buys XL Health!
Here's what we surmised in the original post on this topic:
"That leaves United. A leadership position in C-SNPs would fit well with United’s leading position in…
In complex system, even small changes can have big, unexpected consequences. These are occasionally beneficial but more often than not have a negative impact.
Over the las…
Summary
Provider discounts are a key priority for national accounts – which puts CIGNA (CI) and Aetna at a disadvantage; CI responding in part by trying to get closer to providers
A provider collabor…
1. The final ACO rules largely maintain the demanding economic parameters for mature ACOs (Track 2) found in the originally proposed version (relative, for example, to the original PGP demonstration p…
Kaiser’s latest employer benefits survey offers some interesting data on the adoption of narrow (or high performance) network products. See chart below:
Couple of observations:
Overall adoption at …
Why would a health plan want to buy an exchange? Isn’t the only synergy if the owning plan tilts the exchange in their products favor? And won’t that damage the value proposition of the exchange for…
The Stewards-Tufts deal announced today will create a narrow network insurance product targeting the small group segment. As reported, members covered by the plan must get all routine care from Stewa…
Part of the theory of ACO value creation is trading off more primary care (resulting in better care coordination, fewer missed time bombs, and use of lower cost care options) against reduced use of sp…
A few weeks ago, UPMC announced an agreement among nine area systems to spend $4M over the next two years to launch a health information exchange called ClinicalConnect. Reportedly, Highmark (and pres…
Earlier this month, Blue Shield of California announced 2010 results from an ACO partnership with the Catholic Healthcare West hospital system and Hill Physicians. The ACO achieved savings of $20M on …
Much of the public speculation (for example here and here) regarding the acquisition of a local high quality safety net health plan -- is it about locking in Medicaid volume? or about doing a “good de…
Last week, the National eHealth Collaborative published a study of sustainability strategies for 11 leading health information exchanges (actually 12 including the VA). I’ll call these public HIEs to …
Historically Blues have shied away from Medicaid. Two thirds of plans do not serve any Medicaid and those that do often have disproportionately small shares. No real surprise: Medicaid specialist plan…
Summary
ESRX was running at close to maximum capacity at its mail facilities while MHS has room to spare.
ESRX is facing a scenario of significantly increased demand as greater mail penetration is …
UNH’s decision to take the commercial PBM business in-house did not force MHS into ESRX’s arms: I would argue that it removed the major roadblock to what the companies wanted to do anyway. MHS and ESR…
Payflex is an administrator of account-based benefits including HSAs, HRAs, FSAs and COBRA benefits. The company has $58M in revenues, 1M individual consumer accounts and 3,300 employer customers. On …
Highmark will invest up to $475M in the West Penn Allegheny Health System, a move characterized as a prelude to purchase. This is no bold move to drive closer integration of information flows and care…
Summary
Wellpoint probably paid full value for Caremore (if that company's performance is as powerful as limited data suggests) but did not overpay.
In addition, Caremore offers several powerful ups…
Summary:
Blue Shield of California (BSC) has committed to keeping profits at 2% of revenues or less (and returning any excess).
The commitment is economically meaningful: $180M of 2010 revenues will…
Yesterday, McKinsey released a report suggesting that 30% of employers will definitely or probably stop sponsoring health insurance after the Federal reform "big bang" in 2014. Although disputed by th…
Summary
Massachusetts small group went from an average actuarial value (share of expected medical costs covered by the benefit) of 85% in Q1-07 to 73% in Q4-09. In the same timeframe, actuarial benef…
Summary
Self-insurance is growing among smaller groups (including those sized 50-250)
From a competitive point of view, it will be hard for insurers holding attractive groups in risk products …
Public health insurers startled the market with earnings ~25% above consensus expectations. A key driver was lower-than-expected utilization (particularly in the under 65 commercial lives) which kept …
Summary
A new article in the NEJM suggests ACO economics will be unattractive because of the costly upfront investment and low probability of shared savings payments.
However, the results of the Med…
Summary
A new study from Center for Studying Health System Change suggests that new Medicaid eligibles under reform will have trouble getting access because most primary care are not accepting new M…
Summary
The line between health plan and provider continues to evolve: the Aetna-Carilion deal exemplifies providers backward integrating into insurance (and contrasts with other providers exit…
Summary
Health plan profits will be down dramatically in 2011 due to MLR rules
Providing care management services to providers building out ACOs and medical homes can open new revenue streams outsi…
Remember the idea that coordination will improve care? Well, if physicians do not get timely reports from other providers, their patients seem to have lower costs!!! This from a new study o…
New MedPAC report on Medicare fee for service utilization finds large geographic variation not explained by underlying risk or better outcomes. Another indicator of our HC system gone haywir…
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