Nearly a yr after the primary confirmed case of COVID-19 within the U.S., a few of the nation’s largest well being programs made a case for the necessity to speed up towards value-based preparations and probably buying or partnering with well being plans to grow to be an built-in system.
Amid new data for deaths and circumstances from the novel coronavirus, executives gathered nearly for J.P. Morgan’s 39th annual healthcare convention, which generally attracts outstanding healthcare leaders to San Francisco at the beginning of every yr.
The pandemic has been a closely mentioned matter through the digital gathering. One theme has been well being programs both acknowledging they’re on the hunt for well being insurer acquisitions and partnerships or advocating for such preparations as results of the challenges.
Anu Singh, the chief of the mergers and acquisitions follow at consultancy Kaufman Hall, stated it is a pure migration for well being programs, although it does include some danger.
“If you want to move into the realm of being a population health manager, and take greater responsibility for your patient bases, you’re going to have to be thinking about maintaining their health,” Singh stated. “And that’s typically something that, at least traditionally and historically, has been driven a little bit more by the health plan.”
For Utah’s Intermountain Healthcare, the teachings of the pandemic are clear: The business wants to maneuver away from a system that rewards quantity. Intermountain is a completely built-in system that manages each suppliers and an insurance coverage unit.
“It is becoming increasingly apparent that systems that are well integrated, especially systems that understand how to take risks, have prospered in the face of the terrible burden, caring for people in the midst of the first pandemic in 100 years,” Intermountain CEO Marc Harrison stated Monday.
From his vantage level, Harrison stated it has been fascinating to observe the consternation round telehealth visits.
“Lots of folks who are really still caught in the volume-based system are actively switching patients back from tele- or distance to in-person visits so they can maximize revenue,” he stated. “I understand that. But that’s a really great example of poorly aligned incentives.”
Intermountain has managed to remain within the black as many different programs have struggled financially because of the pandemic driving down affected person volumes. It reported net income of $167 million by way of the primary 9 months of 2020, in contrast with $919 million the yr prior.
Another built-in system, Baylor Scott and White Health, the biggest nonprofit system in Texas, stated such diversification has helped buoy its funds as hospital and clinic operations bottomed out within the spring because of the virus.
Baylor Scott and White illustrated this level by exhibiting how working revenue for its medical phase took a nosedive within the spring whereas working revenue for its well being plan remained comparatively regular.
The theme of built-in well being programs additionally appeared to be on the minds of buyers. CommonSpirit Health executives had been requested throughout their presentation if shopping for or making a well being plan was on their radar because the system has a large footprint of 140 hospitals throughout the nation.
“I think this is a interesting question, one that of course we’ve discussed many times strategically,” CFO Daniel Morissette stated, noting the system does have quite a lot of regional plans. “At this time, we have no plan of having a national CommonSpirit branded plan.” However, Morissette stated the system would take into account a partnership alternative.
On the opposite hand, Midwest-based Advocate Aurora Health stated it’s actively on the hunt for a possible insurer deal as a part of its long-term technique.
“We do believe that having health plan capability, not necessarily having our own, but partnering for health plan capability, is going to be critical to our success, and we are taking steps to do that,” CEO Jim Skogsbergh stated through the digital convention.
Kaufman Hall stated in its newest report that it expects more payer-provider partnerships because of the pandemic. “Limitations on fee-for-service payment structures exposed by the pandemic may increase the number of payer-provider partnerships around new payment and care delivery models,” in accordance with the report.
Singh of Kaufman Hall stated it isn’t stunning that some might lean extra towards a partnership because of the dangers of beginning a brand new enterprise, particularly an insurance coverage unit that may have “catastrophic loss”. Systems with much less expertise of transferring towards implementing value-based initiatives could also be extra weak to such danger.
It’s why he thinks partnerships could also be an excellent match, at the least at first. Payers and suppliers can work collectively to enhance the well being of sure populations after which share in the fee financial savings.