provider business model Archives

While we wait for our shot(s); an opinionated take on NEJM highlights for January 2021

Marc Herant February 2, 2021

Incremental progress in the fight to treat heart failure After a decade or more of relative quiescence in the 2000s, a volley of new therapies have come to the forefront in the pages of the NEJM: sacubitril valsartan (2014 – Novartis’ Entresto), various SGLT2 inhibitors such as dapagliflozin (2019, AstraZeneca’s Farxiga), vericiguat (2020 – Merck’s Verquvo), and now a 2021 entry from Amgen in the form of the cardiac myosin activator omecamtiv mecarbil. None of those are a panacea, and of the four listed, omecamtiv has the lowest efficacy profile

Full-service vs. self-service: an emerging bifurcation in healthcare

Marc Herant June 13, 2019

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 knee injury sustained while skiing, and moderate episodic depression, with a medication list of one chronic medication, and one medication as needed. Joe is a bus driver whose recent health care has focused on managing Type II diabetes, hypertension, and low back pain, with a regimen of 4 chronic medications, and 2 medications as needed.

We may figure out cancer before we figure out the healthcare system: an opinionated take on NEJM highlights for November 2016

Marc Herant December 1, 2016

“My name is T-Cell…, James T-Cell” Immune T-cells are licensed to kill other cells through a quick molecular kiss of death, and as such are potentially powerful allies in controlling a tumor. For obvious reasons this killing power is under strict regulatory control and in particular T-cells display PD-1 proteins on their surface, which when engaged by the ligand PD-L1 on another cell, protects that cell from being killed. Tumors often display high levels of PD-L1 so that disrupting the interaction between PD-L1 and PD-1 can enhance the effectiveness of

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

Marc Herant November 13, 2016

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 supercalifragilistic products on my way to scholarly papers with tables and figures. But this time, I stopped in puzzlement when I came across exhibit 1; Intermountain is a health system based in Utah, very highly respected for its sound approach to quality and cost control[1], but not broadly well known for cancer care

The many ways in which decreasing volatility in individual health care utilization is valuable

Marc Herant June 17, 2016

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 occurrence of medically expensive conditions. Rigorously proving this has been difficult, and only a few appropriately controlled studies have been published. In a Letter to the Editor of the American Journal of Managed Care[1], my colleague Alex Brown and I commented on an earlier article[2] evaluating the impact of a community health worker (CHW) intervention on healthcare costs. The study showed no significant

NEJM Highlights April 2016: Value and values: RBRVS, ACA and readmissions, E-cigs

Marc Herant May 2, 2016

RBRVS: an acronym we ought to think more about RBRVS stands for the Resource Based Relative Value Scale, and codifies the time and effort involved for a comprehensive set of physician activities on which Medicare payments are based. In this perspective, the authors highlight that most value-based payment (VBP) systems currently under development are essentially built as modifiers on top of the RBRVS. But the RBRVS has two major issues with it: it is “downward sticky” and has not evolved to take into account increased efficiency (e.g. automation), and it

NEJM Highlights March 2016: Getting value for money in healthcare, Zika bad news, linking the microbiome to the metabolic syndrome

Marc Herant April 3, 2016

Could Uber happen to healthcare? A Perspective article that points out that the success of Uber is rooted in the flaws of an industry where customer convenience and value for money took the backseat to the interest of a set of service providers highly protected by regulation. Sounds familiar? Obviously, the regulatory moats of healthcare are much wider and deeper, but in a curious mix of warning (watch out!) and encouragement (this will be good for you if you embrace it!) the authors argue that the medical profession should not

NEJM Highlights November 2015: systems biology, RSV progress, a first in diabetes, hypertension goals, the case of Maryland

Marc Herant December 1, 2015

Systems biology finally gets real: an unexpected use for a diabetes drug Chronic Myelogenous Leukemia (CML) has been the poster child first for a disease with a precise genetic cause (the Philadelphia chromosome), and then for targeted drug design (with imatinib – Gleevec). Unfortunately, few patients achieve a complete response to therapy which means that they have to stay on drug indefinitely. This commentary highlights recent research which shows that pioglitazone (Actos), an approved diabetes drug that activates a specific cellular pathway (STAT5) can synergistically enhance treatment with Gleevec to

Working paper: the coming age of algorithmic medicine

Marc Herant October 25, 2015

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

Comparing the emerging national networks of Cleveland Clinic and Mayo Clinic

Tory Wolff April 10, 2015

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

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

Tory Wolff September 26, 2014

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

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

Tory Wolff September 4, 2014

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

Apple HealthKit, provider partnerships and walled gardens: three observations

Tory Wolff June 9, 2014

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

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

Tory Wolff March 16, 2014

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

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

Tory Wolff October 3, 2013

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

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

Tory Wolff September 30, 2013

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

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

Tory Wolff September 23, 2013

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

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

Tory Wolff September 1, 2013

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

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

Tory Wolff August 20, 2013

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

Ambidextrous strategy: PART 2 – Scenario Implications

Nikhil Bhojwani July 17, 2013

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

Tag: provider business model

Recon takes an analytical look behind select developments in healthcare