Value-Based Care News Digest - April 2021

April 9, 2021

Evolent Health rounds up value-based care news spanning policy, research, innovations, payers and providers. This month's update covers developments in February and March.

 


Top Trending Themes

1. Value-based primary care: Companies offering direct primary care services continue to grow and expand.

  • VillageMD is expanding into Michigan, with plans to open more than 15 new clinics in Michigan. With the new locations, VillageMD will cover 12 markets spanning 600,000 lives and $4 billion in total spend under value-based contracts.
  • Kaiser Permanente is in the process of doubling the number of its retail clinics over a four-year period—from 17 in 2018 to 35 in 2022. Retail clinics are a low-cost alternative to traditional treatment locations (physician offices and emergency rooms) with care costing about 30-80% less. Kaiser Permanente also indicated that this new version of retail clinics will focus on bringing in specialists via telehealth.
  • Aetna is partnering with Iora Health to provide primary care services for group Medicare Advantage plans in the Houston area. Texas is a growing market for Iora, with six practices spread between Austin and Houston.
  • Humana has rebranded its health care services business to CenterWell, with Partners in Primary Care expected to be one of the first to adopt the name change. Under the new brand, the company expects to open 20 additional clinics into 2022. However, Humana's Conviva business, located in South Texas and South Florida, will not join in the name change.
  • Best Value Healthcare, a value-based primary care platform located in Tampa, is acquiring MAXhealth, a multi-specialty primary care group in West Florida. The combination will strengthen Best Value Healthcare's Florida presence and allow it to deliver on its model of high-quality, low-cost care to Medicare beneficiaries in the state.
  • DispatchHealth raised $200 million in its Series D funding round, following its Series C less than a year ago, bringing its valuation to $1.7 billion. The company, which offers at-home acute care and advanced level medical care in 19 markets across 12 states, is looking to expand to 100 markets.
  • Forward Health, a tech-enabled primary care company, raised $225 million in its Series D round from notable investors such as the Weeknd. The company claims to be the "primary care of the future," offering access to futuristic medical technology such as biometric body scans, genetic testing and real-time blood testing in 12 minutes.​

2. Payer and payer administrative services are heating up as companies continue to bring in large amounts of capital via the public market or private investors.

  • Alignment Healthcare, a health insurance startup, has announced that it is preparing to enter the public market. The company was founded in 2013 and offers both individual MA plans but also provider care directly, offering 24/7 in-home support through its affiliated physician model. Alignment announced membership of 80,500 in February, a 63.2% increase from the end of 2019 and was valued at $1 billion as of March 2021.
  • Oscar Health raised $1.4 billion in its initial public offering, putting it on pace for a $7.9 billion valuation. The company initially indicated that it would price its shares between $31 and $34. They ended up coming in at $39.
  • Innovaccer announced its $1.3 billion post-money valuation and indicated that it would utilize its additional funding to expand platform capabilities, unify patient data across various systems, and continue to drive savings for partners. The company is currently forecasting >100% CAGR over the next 5 years.
  • Komodo Health, a company offering AI and data analytics tools to providers, raised $220 million in its Series E funding round, bringing its valuation to $3.3 billion. The company's technology solutions provide clinicians with timely data and alerts to improve care, describe products' performance, and other real-world analyses.

3. As cash continues flowing into companies seeking to enter or expand into the telehealth market, large players are making moves through acquisitions or partnerships.

  • New Entrants & Expansions
    • Amazon announced expansion plans for Amazon Care, its telehealth service that was initially available only to employees based in Washington State. The company will offer the service to all employees nationally, as well to other employers.
    • Ro, a digital health company that started by offering low-cost consumer prescriptions delivered to the home and most recently expanded into telehealth, has raised $500 million in its Series D funding round. Now valued at $5 billion, the company intends to use these funds to expand its primary care platform, pharmacy distribution network and in-home care services.
    • SpineZone, a value-based, virtual physical therapy platform, raised $12 million in its Series A funding round. The company helps patients avoid expensive surgeries by taking a preventive approach to pain management, offering both virtual and in-person exercise regimens.
    • ZocDoc, an online medical appointment service, raised $150 million to expand its services, offering patients access to virtual care appointments in addition to in-person appointments.
  • Acquisitions/partnerships
    • Health insurer Cigna acquired telehealth company MDLive and plans to incorporate its services into Cigna's Evernorth subsidiary.
    • Humana partnered with Mercy, a Missouri-based health system, to offer virtual, value-based care to its Medicare Advantage patients, using Mercy's virtual care platform.
    • The Cleveland Clinic announced its partnership with American Well to offer virtual second opinion services to complex patients, providing people around the world with access to leading medical institutions.

Industry News

Payers

  • Highmark completed its affiliation with HealthNow New York, making it the country's fourth largest Blues plan, with more than 6 million members. Under the deal, HealthNow will become Highmark Blue Cross Blue Shield of Western New York and Highmark Blue Cross Blue Shield of Northeastern New York.
  • HCSC is partnering with Collective Health, a technology company that has developed a platform that helps self-funded employers administer benefits, reduce workload, manage costs, and holistically manage the health of its members.

Specialty Care Management

  • Grand Rounds, a company that connects patients with high-value specialists in its network, announced its acquisition of Doctor on Demand, a virtual care provider. By combining forces, the new company hopes to improve care coordination across our fragmented health care system.
  • Fresenius Medical Care North America, launched its Kidney:365 program, focused on supporting patients with complex, chronic conditions such as chronic kidney disease, diabetes and hypertension. The program provides care coordination and education to improve outcomes and quality for patients in partnership with InterWell Health.
  • DaVita is partnering with Fresenius to let patients perform their own dialysis at home. In early 2019, Fresenius acquired a technology platform that will help providers monitor treatment irregularities and potential complications, while giving patients the freedom to deliver their own care from home.
  • Strive Health announced its $140 million Series B funding round led by Alphabet's CapitalG, bringing its total funding to $223.5 million. The company intends to use Google and Alphabet’s services to support its tech-enabled care model dedicated to providing patients with chronic kidney disease with higher quality care.
  • MPowerHealth, the largest quality-driven, independent, clinically integrated network in Texas, announced its $7 million investment to develop a technology infrastructure that will support value-based care initiatives for independent musculoskeletal physicians.

Telehealth

  • Teladoc reported Q4 revenues of $383 million, up 145% from $156 million in the same period in 2019. The company's 2020 revenue reached $1.1 billion and delivered 10.6 million virtual visits, up 156% from 2019, further highlighting the tremendous utilization and growth in telehealth during the COVID-19 pandemic. Teladoc expects this trend to continue into 2021 with visits increasing between 12 million and 13 million.
  • UnitedHealthcare has a new virtual program for patients needing hearing aids. Called Right2You, the program is available under UHC's employer plans, individual plans and Medicare Advantage plans. The company estimates that this new model will save members between 50% and 80% compared to traditional hearing aid processes.
  • Quest Diagnostics and 98point6 have partnered to provide patients with text-based primary care following laboratory testing processed by Quest. Patients will be able to receive consultation on their lab work without having to visit a doctor in person.
  • Modern Health, a women-founded virtual mental health care startup, has raised $74 million in its most recent funding round, bringing its total valuation to $1.17 billion. The company has grown tremendously since October, doubling its revenue, tripling its employee headcount, and doubling its customer base. The company's main customer base is employers, showing a growing awareness and a high priority for employee mental health, especially during the pandemic.
  • Equip, a startup providing virtual eating disorder therapy, has raised $13 million in its Series A led by Optum Ventures. The company takes an evidence-based approach to helping patients and families recover from eating disorders.

Hospice

Home Care

  • Anthem announced its acquisition of MyNexus, a home-based nursing management company that provides services to 1.7 million Medicare Advantage members. The company's platform provides automated home visit authorizations, improves provider effectiveness and member satisfaction with their user-friendly interface. This combination will further accelerate Anthem's strategy to provide holistic patient care on a larger scale.

Government & Regulatory

CMS

  • In early March, CMS placed a hold on the proposed Geographic Direct Contracting Model as it reviews the terms of the program with the Biden Administration. ACOs and provider-led organizations have expressed concerns about this new model, as it has potential to create an uneven playing field that favors "new entrants" over provider-led groups that have higher barriers to entry.
  • Hospital systems and home-based health care companies are lobbying Congress to make permanent changes to CMS home health care reimbursement. Companies include Amazon Care, Ascension, Intermountain, DispatchHealth and others. Hospitals systems are requesting to continue their hospital-at-home programs, which have been preferred over traditional hospital care by 90% of Medicare patients. Home-based health care companies seek to have Medicare cover high-acuity home based services, which are preferred to nursing home-based care and is 25% more likely to avoid readmission within 30 days of hospital discharge.
  • CMS delayed its Kidney Care Choice model, which was announced in 2019 and expected to launch in April, following its original delay due to the pandemic. The model is now expected to launch in January 2022, providing additional time for implementation.

Evolent News

  • Evolent recently collaborated with faith-based community leaders in Chicago to launch a COVID-19 vaccine video education program expected to reach up to 1 million Black and Latinx congregants. Read the press release or watch a news segment.
  • Evolent announced 40% growth from 2020 in the population served by its Evolent Care Partners ACO network, as well as 30% growth in participating primary care physicians.
  • New Century Health (NCH), Evolent's specialty care management business, announced that 2020 saw the largest growth in NCH's 19-year history, with a 43% increase in health plan membership.

Survey Says/Studies Show

  • A BCBS study found that the cost of hospitalizations for COVID-19 was about 45 times higher than the cost of outpatient treatment. For those treated in an intensive care unit, costs were 2.5 times higher than the average hospitalization. Cost per admission was approximately 30% higher for those with high-risk conditions such as diabetes and obesity.
  • An Urban Institute study found that Medicaid expansion efforts have made a significant impact on young adults, with an increase in enrollment of 11-15%, decreasing the uninsured rate from 30% to 16% between 2011 and 2018.

People on The Move

  • Elizabeth Fowler, former special assistant on health care and economic policy in the Obama administration, was chosen as head of the Center for Medicare and Medicaid Innovation. Fowler played a key role in drafting the Affordable Care Act and has previously held roles at Johnson and Johnson and the Commonwealth Fund.
  • Kelly Munson, former chief Medicaid officer at WellCare, has joined Aetna as president of its Medicaid business.
  • ConcertoCare appointed Amy Flaster, MD, MBA as chief medical officer.
  • AristaMD announced the hiring of Rebecca Chi as chief client experience officer.
  • Alignment Healthcare appointed Rajesh Shrestha as president, new markets, and chief business officer. Rajesh, who previously served as chief operating officer at Intermountain, will focus on growing the senior population in new markets.
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