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The NetMinder Blog

Healthcare Mergers On the Rise in 2018

Posted by Laura McMullen on Thu, Feb 22, 2018

A trend that got a lot of attention at the end of 2017 was insurers moving further into healthcare delivery. These three high-profile transactions are just the latest examples:

  • Humana purchased 40% of Kindred Healthcare, a group of long-term acute care and inpatient rehabilitation hospitals.
  • United Health Group purchased DaVita Medical Group, nearly 300 clinics and six outpatient clinics in Florida, California, Colorado, Nevada, New Mexico, and Washington, from DaVita Inc., one of the largest kidney care companies in the U.S.
  • CVS is buying Aetna, combining CVS’ retail presence, pharmacy solutions, infusion services, and nursing professionals providing in-clinic and home-based care across the nation with Aetna’s national, regional, and state insurance offerings.

mergers and acquisitions.jpgIn Pennsylvania, the line between providers and insurers has been blurred for a long time. Highmark Health and the University of Pittsburgh Medical Center are realigning their networks as they compete for market share in central Pennsylvania. Most UPMC hospitals are leaving the Highmark network in June 2019. Highmark’s Allegheny Health Network announced a partnership with Penn State Health in December 2017 and a joint venture with Geisinger in May 2017. UPMC formed a joint venture with Reading Health System in late 2016 to offer health insurance in southeastern Pennsylvania and completed a merger with PinnacleHealth in September 2017. Additionally, both systems are investing in specific service lines in Pittsburgh. This Modern Healthcare article details the rivalry between the two companies.

And more mergers appear to be on the way in 2018. The results of a Capital One Healthcare survey in Modern Healthcare found that about half of the respondents in its middle-market sample plan to buy or merge with existing businesses this year. In addition, 20% said they plan to revitalize and update existing offerings while 21% said they plan to launch new segments or sectors. The primary reasons cited for these actions are pricing pressure, availability of private equity, and filling in service gaps. The uncertainty around the Affordable Care Act is inhibiting the desire to add new businesses somewhat, particularly in segments dominated by government-sponsored insurance.  

How are provider mergers affecting your network? What about provider-insurer combinations?

Tags: healthcare mergers, healthcare networks, healthcare providers, healthcare insurers, health insurance mergers, insurance networks, healthcare system

Kaiser Permanente Hires Harvard Professor to Lead Medical School

Posted by Laura McMullen on Thu, Nov 02, 2017

medical school students.jpgThe lines of communication between doctors and insurance companies are key elements to make sure that patients get the treatment they need. Kaiser Permanente established a medical school affiliated with its hospital system with a vision “to provide a unique medical education embedded in a physician-led health care delivery system, that ignites a passion for learning, a desire to serve, and an unwavering commitment to improve the health and well-being of patients and communities.” The school broke ground in September 2017 and will enroll its first class of students in the fall of 2019.

Carey Goldberg, CommonHealth blog editor at WBUR, interviewed Dr. Mark Schuster about his plans for the Kaiser Permanente School of Medicine. Here are some highlights:

  • Students will have experience in clinical settings from the very beginning. Schuster says, “our students will be in clinical settings from the start, doing work that’s appropriate to their level of experience. They might be interviewing patients or serving as navigators for them. We want our students to understand what it's like to be a patient who is intimidated by the health care system, fearful of potential diagnoses, confused by the jargon.”
  • Courses will use a variety of teaching and learning methods. Classes will be small-group and case study-based. Spiral learning techniques will be used – introducing concepts early and returning to them regularly as students progress. Some classes will be ‘flipped’; where students watch videos, complete exercises, and read ahead of class so that class time can be spent in more interactive pursuits.
  • Graduates will contribute to a wide variety of communities. Schuster wants “students to be able to choose their field and where they practice without the constraints of the high debt that so many medical students have.” And Kaiser Permanente is providing the school with significant financial aid. Additionally, students will not be obligated to work for Kaiser Permanente after graduation. “The goal is to teach students who will spread out around the country and beyond, and take their skills everywhere and teach others around them,” said Dr. Schuster.

The Kaiser Permanente system is unique in that it is an integrated delivery system that also offers insurance. Their goal of preparing doctors who are lifelong learners, focused on health instead of disease, go beyond the clinical setting to understand patients’ needs, and use data to find gaps and solve problems who can share that knowledge throughout the healthcare system is admirable. The first class of prospective doctors will have 48 students and subsequent classes will grow to 96 students.

Is this a strategy that other public and private health insurers would benefit from? Are there opportunities for collaboration in areas like evidence-based medicine and establishing coverage in health professional shortage areas?

Tags: medical school, hospital system, health insurance, healthcare system, health insurers, healthcare providers

Studying the Accuracy of Provider Directories

Posted by Laura McMullen on Thu, Jul 27, 2017

Many people have had this experience – you’re looking for a new healthcare provider in your insurance plan’s directory and when you call, that doctor (or dentist or optometrist) doesn’t work at that location any more or the office isn’t accepting new patients. So you move on to the next name on the list and keep calling. As market forces, government regulations, and rising costs combine to focus more attention on every aspect of the health insurance industry, two recent initiatives examine provider directory accuracy.

provider-directory-4.jpg

CMS Online Provider Directory Review

In a previous post, we shared the preliminary findings from a CMS project designed to assess provider directory accuracy. CMS released the final report which confirmed that 47% of the 5,832 provider records reviewed in Medicare Advantage networks had at least one deficiency and listed the names and results of the 54 health plans involved in the audit along with the compliance actions taken. Fierce Healthcare summarized the results here.

AHIP Provider Directory Initiative

Between April and September 2016, AHIP executed a large-scale project to evaluate a variety of ways to update directory information. This issue brief summarizes the project including background on the vendors, methodology, and results of an independent evaluation by NORC at the University of Chicago. A blog post from March 2017, What It Takes to Improve Provider Directories, discussed the findings and offered potential solutions in actions that could be taken by providers and networks:

  • Provider side: enforce contractual requirements and offer incentives to providers
  • Network side: use multiple channels and media to connect with providers such as email, phone, mail, fax, and provider one source to update data for multiple plans

The prevalence of inaccurate data that CMS found and the low response rates plus lack of information about the importance of updating directory information underscore the complexity of maintaining this information. “The root cause of the problem isn’t the directories themselves; it’s the underlying data. Capturing, storing, and retrieving provider data has always been a complex process,” writes Mark Martin, Availity’s director of payer solutions, provider data management, and Dianne Wagner, senior director, provider engagement and enablement at Guidewell, in Managed Healthcare Executive.

The importance of accurate provider directories to the whole healthcare industry – consumers find providers and make appointments easily, providers earn the advertising and publicity benefits of inclusion in provider directories, and networks improve customer satisfaction, compare provider directories, and avoid compliance actions – make fixing this problem a chronic priority.

What steps are you taking to improve the accuracy of your provider directory?

Tags: provider directories, healthcare providers, healthcare system, provider networks, health insurance

High Hospital Costs Encourage New Entrants To Market

Posted by Laura McMullen on Thu, Mar 10, 2016

Hospitals are the cornerstone of our healthcare system. The Centers for Disease Control and Prevention’s National Center for Health Statistics reports there were 35.1 million discharges in 2010 with an average length of stay of 4.8 days, based on the National Hospital Discharge Survey. The 2014 National Health Interview Survey showed that just 7.3% of Americans had an overnight hospital stay. Even though most people don’t need to go to the hospital regularly, hospital costs are what we’re insuring against when we buy health insurance.

According to Kaiser State Health Facts, the adjusted average hospital expenses per inpatient day in 2014 were:dollar.png

  • $2,346 for non-profit hospitals
  • $1,974 for state/local government hospitals
  • $1,798 for for-profit hospitals

So for an average hospital stay at a non-profit community hospital, the cost would be approximately $11,250 or 21% of the median household income of $53,657. Fortunately, most people won’t need to go to the hospital at all.

The American Hospital Association reports there are just 5,627 hospitals in the US. While all accept Medicare, NetMinder shows that 85% are in-network for the broadest national commercial health insurance networks. This means that roughly two-thirds of the US population is a potential customer for 3,800 hospitals.

Hospital Alternatives

With a limited footprint, high demand for services, and third-party payment mechanisms, it’s no surprise that substitutes and complements are entering the marketplace.

  • Ambulatory surgery centers. There are approximately 5,000 ambulatory surgery centers in the US. According to the Ambulatory Surgery Center Association, its members offer “same-day surgical care, including diagnostic and preventive procedures.” Common services are cataract surgery and colonoscopies.
  • Urgent care centers. The Urgent Care Association of America estimates that there are about 7,100 urgent care centers in the US. These facilities offer “a baseline of a broad scope of both ‘primary care’ type services as well as more acute care that is beyond the typical primary care office but below the treatment of life or limb-threatening conditions.”  Patients frequently need treatment for sprains, fevers without a rash, and ear pain.

While hospitals, ambulatory surgery centers, and urgent care centers compete for patients, they also have an opportunity to deliver on the promise of the Triple Aim: applying integrated approaches to simultaneously improve care, improve population health, and reduce costs per capita. Whether your book of business includes government-sponsored plans, individual plans, or employer-sponsored plans, all customers benefit from increased access to quality care.

How well are ambulatory surgery centers represented in your network? What about urgent care centers?

Tags: medicare, American Hospital Association, ambulatory surgery centers, urgent care centers, healthcare system, healthcare providers

 

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