Future of Provider-Sponsored Health Plans and Managing Risk

By Cathy Eddy, December 1, 2014

Deloitte Consulting conducts an enterprise wide risk assessment with Presbyterian Health Services annually and the information is leveraged by the health plan.

Health systems are looking at their range of options for the future – most with an eye for making the transition from fee-for-service to value-based reimbursement. These options include shared savings programs, bundled payments, accountable care organizations, some form of capitation or global payment and for some, starting or growing a health plan. These options involve varying levels of risk.

As the lines blur between payers and providers, it is important for health systems to carefully evaluate their strategies and their partners to be successful in the future. It will also mean doing business differently and navigating through the major challenges that have been driven by marketplace dynamics and health care reform.

Many organizations have identified provider-sponsored plans as a “hot topic” and are trying to identify the keys to success with this model. As systems move to value-based reimbursement, a health plan can act as both a catalyst and an accelerator for change.

For almost 20 years, the Health Plan Alliance has been working with integrated delivery systems that have health plans. These are the systems that stayed with the vertical strategy when many of their colleagues sold off or closed down their insurance arms. The health systems that stayed committed to owning a health plan are now at a strategic advantage in many ways:

  • They have a vehicle to understand and manages risk
  • Health plans have the infrastructure to manage populations 
  • A closer link to the marketplace 
  • Better understanding of managing care 
  • Ability to gather and analyze quality data for the populations served 
  • A driver for more clinical integration 

What are some of the key considerations for systems to consider when owning a health plan or partnering with one?

  • What are the populations you want to serve – commercials, exchanges, Medicaid Advantage, Medicaid or duals? These all have different risk challenges 
  • Do you have the financial resources to fund a start-up and maintain the risk-based capital requirements? 
  • Do you have or can you acquire the expertise to run a successful plan? 
  • Does it make sense to partner with another health plan or payer?
  • Are you willing to make the delivery system changes need to manage risk? 
  • Are your physicians organized to take on risk and support quality measures of a health plan? 
  • Are you organized to manage the care of a population along the healthcare continuum?
  • Are you thinking about direct contracting with large employers in your marketplace?

The members of the Health Plan Alliance have a wealth of knowledge about how integrated delivery systems are managing risk. Last month, our Fall Retreat addressed the various levels of risk that a health plan manages – governance, product lines, physician alignment, clinical integration, financial and business continuity.

If you weren’t able to attend this meeting, you can find the presentations on our website and you can request a video recording of the meeting.  Managing multiple levels of risk will continue to be a challenge for health systems in the future, especially those that have made the strategic investment to own a health plan. 


Lung Cancer Misperceptions: The “Any One Any Lung” Survey

By Clive Riddle, November 21, 2014

Misperception surrounding a disease can impact treatment, care, funding, and more. So it would seem is the case with lung cancer, as just highlighted in a new survey “Any One Any Lung” Survey sponsored by Novartis Oncology. The online survey was conducted by Harris Poll involving 10,111 adults from 10 countries including the U.S., 84% responding that they know little or nothing about lung cancer. The stated goal of the campaign surrounding the survey is to “to raise global awareness of lung cancer as a complex disease that can affect anyone, regardless of gender, age or smoking history.”

Stefania Vallone from the organization, Women Against Lung Cancer in Europe, has this to say in conjunction with the survey: “While patient advocates around the world have played an important role in raising lung cancer awareness, misinformation continues to surround this disease, creating barriers to treatment and patient care and often generating negative attitudes towards patients affected by this disease. We are calling on the general public to help correct misperceptions around lung cancer and highlight the disease for what it truly is, a complex and heterogeneous disease with many causes that can affect anyone, regardless of age, gender or smoking history, and that over the past 30 years has doubled in incidence and mortality rates, especially among women."

Here’s results from the survey that Novartis shared to make their case regarding misperceptions:

  • 59% didn't realize that lung cancer causes the most cancer deaths worldwide
  • 55% of adults feel that people with lung cancer are mostly or fully responsible for causing their cancer, compared to the levels perceiving the same about people diagnosed with prostate (12%), colon (14%) or breast (11%) cancer.
  • 17% believe that all people who are diagnosed with lung cancer are current or former smokers
  • 75% immediately think smoking is the cause when they hear someone has lung cancer (approximately 10 – 15% with the disease have never smoked)
  • 40% say there is little support or compassion for people with lung cancer in their country
  • Only 23% recognize changes in genetic makeup as a cause of lung cancer
  • 6% believe no one under the age of 40 can get lung cancer
  • 19%) recognize that therapies targeted to a specific change in genetic makeup can be used to treat lung cancer, significantly less than mention chemotherapy delivered directly to into the blood, (68%), radiation (66%), surgery (61%) and therapies that help the body's immune system fight cancer (52%)

Health Care Fraud Detection: Intersection of Data and Linking Analytics

By Claire Thayer, November 19, 2014

LexisNexis tells us that three key elements of successful link analysis are Big Data, Super Computing and Social Network Definition and that the three big data necessary for successful link analysis include claims data, provider data and member data.  In August earlier this year, LexisNexis hosted a webinar, Moving Fraud Prevention Forward: The Intersection of Data and Linking Analytics.  Throughout this webinar, the audience engaged in several polling questions - these questions, along with the audience responses are featured in MCOL’s infoGraphoid this week:

MCOL's weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.


The Future Is Still Not Here

By Kim Bellard, November 13, 2014

US News & World Report had some fun looking back at what experts in 2004 predicted for health care in 2014.  Not surprisingly, they found that we're not quite there yet, but might be by 2025.  The future, it would appear, is always ten years away. 

Those 2004 pundits expected that health care would be one of the industries most impacted in these past ten years; specifically:

2004 prediction: In 10 years, the increasing use of online medical resources will yield substantial improvement in many of the pervasive problems now facing healthcare—including rising healthcare costs, poor customer service, the high prevalence of medical mistakes, malpractice concerns, and lack of access to medical care for many Americans.


To be sure, there have been several important changes in our health care system over the past ten years.  Some of the more important ones would have to include:

In terms of realizing those predictions about controlling costs, improving customer service, reducing medical mistakes, or addressing malpractice concerns: well, not so much.

The absolute number of the uninsured has only dropped from 42.0 million in 2004 to 40.7 in 1Q 2014.  Increases in spending have moderated, thank goodness, but most experts attribute this to the recent economic downturn rather than to any structural changes.  Half of Americans now have a chronic disease, and our life expectancy rates still lag most other developed nations -- and may be declining.

If this is progress, I'm not sure we can take much more of it.

By way of contrast, think about the technology world in 2004:

Why isn't health care seeing those kinds of radical changes in the landscape? 

Certainly there have been plenty of important clinical innovations in the last ten years.  Still, I'm hard pressed to think of changes that have become part of people's everyday lives the way that the above tech changes have, 

Critics might claim that smartphones, social media and video streaming don't improve the quality of life, but just dare to try to take them away from people.  By contrast, if you offered to swap health insurance plans from 2004 with today's, I bet most people would jump at the chance, since they cost about 40% less and typically had much lower cost sharing requirements (Kaiser Family Foundation).

I'm also waiting for reports of either physicians or patients being delighted by all those EHRs.

The U.S. News & World Report article mentioned telemedicine as an example that many (still) predict as a key part of the future.  Honestly, if a big breakthrough for 2024 is wider use of telemedicine, I'll be disappointed. 

Don't get me wrong: I'm a big proponent of telemedicine, but in ten years shouldn't we be hoping for something more radical -- like, say, holographic or virtual reality visits?

Or maybe the future is wearables, as everyone is trying to get in on the expected gold rush.  I suspect that wearables in 2024 will bear as much resemblance to today's as our mobile phones do to 2004's, but the real problem won't be the technology as how we'll use all that data.  By 2024 we should be using real-time data to prevent hospitalizations and other acute episodes, but who will pay for, and act on, the monitoring and interventions?

Some people might argue that other ACA initiatives, like ACOs or value-based purchasing, simply haven't had enough time to prove their worth.  That may be valid, but I'm still not seeing the where-did-that-come-from aspects of either.

If in ten years we're all getting care through integrated delivery systems like Kaiser, that might be better for us, but it wouldn't be a breakthrough.

As I wrote in Getting Our Piece of the Pie, I want to see health care's versions of Napster: innovations that are willing to wreck the system in order to reshape it.  I want to see something that connects us to our health in the way that Facebook has connected us with our social circle, that democratizes health information and even treatments like Wikipedia has done for reference, or that untethers us in the way smartphones and YouTube have.&

Let's not wait ten years.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting


Healthcare Innovation Models and Accelerators

By Clive Riddle, November 7, 2014

Intermountain Healthcare and Healthbox just announced an interesting healthcare innovation collaboration, with their Innovation at Intermountain Healthcare Initiative. Intermountain is the Utah-based health system non-profit juggernaut with 22 hospitals, 185 clinics, 1,100 employed physicians, and the SelectHealth health plan.

A physical structure in Salt Lake City is being constructed next to Intermountain’s flagship medical center to house the initiative, which includes three components:

  1. The Intermountain Foundry which they state “provides a structured framework for help high-potential employee ideas and near-market concepts become commercial businesses.”
  2. Strategic Investments that “will source companies from the broader healthcare ecosystem and develop partnerships that include investment and potential customer relationships.”
  3. The Healthbox Salt Lake City Accelerator, which launched in September in partnership with Health Equity, Zion’s Bank and BD.

Healthbox sees themselves as a “preeminent source of healthcare innovation and drives actionable collaboration between inventors, entrepreneurs and the healthcare industry.” They have operations in five key markets across the U.S., in addition to London and Tel Aviv, and a portfolio of more than 80 active companies and strategic partnerships with more than 30 healthcare organizations.

Speaking of Accelerators, the just released November issue of Healthcare Innovation News addresses the question “how can healthcare accelerators ensure success in their quest to nurture entrepreneurs and support their startup ventures?” in their Thought Leaders’ Corner. Below are three selected responses to this question from their Thought Leader panel.

Tom Olenzak, Director, Innovation at Independence Blue Cross in Philadelphia says “we believe that the key issue facing healthcare innovators is access to customers. The investment of time, expertise and resources by potential customers is critical to help startups turn their innovative ideas into sustainable businesses and products. That’s why we participate in healthcare accelerator programs, such as DreamIt Health Philadelphia. DreamIt Health puts a focus not only on providing funding, but also on the mentorship and access needed to nurture the startups.  I’ve seen firsthand how access to a customer’s point of view, along with business knowledge and data, can have a direct impact on the success of startups. Last year we provided anonymous claims data to the startup Grand Round Table and these data helped the company to solidify its value proposition, helping doctors find appropriate diagnoses faster and reducing the number of unnecessary tests and treatments. The healthcare industry, as we know it, is experiencing dramatic change, and the future of the industry relies on innovative thinking to overcome our biggest challenges. Healthcare accelerators that establish the perfect blend of entrepreneurial coaching and corporate support are the ones that will be successful in developing ventures that push the envelope, and deliver solutions that provide high-quality, affordable care that patients deserve. The future of our industry depends upon innovation, but the opportunities are endless when you embrace partnership and have the right mix of bright minds. Most accelerators help companies grow, but those that provide access to customers and other decision makers breed startups that develop sustainable and scalable solutions to the most pressing challenges.”

Scott Shreeve, CEO at Crossover Health in California says he believes “the challenge for health accelerators is to nurture disruptive ideas and companies yet remain connected to the needs of healthcare providers and payers. Accelerators are good at incubating consumer-focused, digital health innovations. Exciting for sure, but we don’t always see how these isolated innovations bridge the ongoing divide between consumers and providers, and the realities of our current third-party payer system. This is critical in our view because transforming the costs and quality of care won’t be consumer, provider or payer led, but a powerful mix of all three. Crossover Health works with leading employers to deliver primary care services directly to employees via worksite, near-site and virtual care models. We focus on delivering an exceptional patient experience, which not only develops deep patient/provider relationships but also inspires people to take ownership of their health. Innovative provider-led, care delivery and new direct payment models support our experience-centered approach. And, critical to its success are our discovery and adoption of digital health technologies that create new channels of communication, enable population health analytics and facilitate chronic health management in new and different ways. Accelerators can help ensure the success of their startups by making a strong effort to collaborate with equally disruptive providers, who are working with payers that are willing to think differently about health. It’s the responsibility of the accelerator to match different key players together to yield the greatest opportunities and results. By creating a mutual selection process, accelerators can show the power and values of true technology and market disruption.”    

Jason Wainstein, Principal at Deloitte Consulting in Philadelphia shares that “ensuring success is a lofty quest given the nature of accelerators. Not all ideas will pan out. So it’s not about batting 1000; its about providing the best environment to foster the maturation of concept into a viable business. Four dimensions that are critical for accelerator success are: Maintain the right temperature. Many start-ups are focused on building their product/service offering and can benefit from enhanced structure and commercialization cadence, as well as lessons learned from prior startups. Providing a playbook allows the thought leaders to stay focused on building the business. Perfect the role of super connector. One of the greatest values of an accelerator is connecting startups with industry leaders, potential investors and target distribution channels. The top accelerators work relentlessly at building their networks and actively connecting their portfolio companies to these relationships. Be a talent agent. With top talent in high demand, having a network of highly skilled resources that can be brought to bear on short notice can make the difference between success and failure given how aggressively startups must move. Know the white space. There is no shortage of ventures that pop up to capitalize on the hype of the moment, for example, analytics, patient engagement, chronic disease and remote monitoring—like moths to a light. Knowing the white space within these areas and guiding startups to differentiated positions are critical. Otherwise, young companies risk becoming noise in an overcrowded system. Accelerators must treat each startup as a customer, focus on the four dimensions above and be selective in which ideas are brought into the fold based on cultural and content fit.”

Derek Newell, CEO of Jiff in Palo Alto says that “accelerators, by definition, exist to help develop very early stage companies. At this stage, entrepreneurs must transition their companies from a concept phase to a delivery phase. In order to do this effectively, they need to clearly define their value proposition, product and business model. There are two key ways accelerators can support entrepreneurs in facilitating this process.

First, accelerators should connect entrepreneurs to potential customers. Customers validate the product and let companies know they have a commercially viable concept. Talking to customers is the most important thing a startup can do to refine its value proposition. In addition, customers provide critical feedback on product. For the first time, the venture will understand the problem and their target customer’s’ needs at the level of detail necessary to create a meaningful solution for it. Finally, accelerators can help startups figure out their business models early. Many entrepreneurs coming into the healthcare space lack a deep understanding of the complexities and nuances of the industry. Unless the venture is developing a new technology, there is probably a good reason that the solution doesn’t already exist. Within an accelerator, industry experts can help the entrepreneur identify and understand the stakeholders, existing systems and barriers to entry. The forces inhibiting the adoption of the company’s solution could include technology, regulation, operations and/or sunk costs, just to name a few.

By introducing entrepreneurs to potential customers and helping them better understand the healthcare industry, accelerators can help startups navigate this space and support them as they refine their value proposition, business model and product.”

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