Every month, Evolent Health rounds up some of the latest value-based care news from the previous month spanning policy, research, innovations, payers and providers.
Top Trending Themes
- M&A activity hasn't relented among primary care organizations, indicating 2020 will continue to bring rapid growth for value-based primary care.
- Humana's Partners in Primary Care announced a joint venture with private equity firm Welsh, Carson, Anderson and Stowe (WCAS) to provide value-based care to Medicare beneficiaries. The joint venture plans to operate payer-agnostic, senior-focused primary centers operated under the Partners in Primary Care brand. WCAS will have majority ownership in the new company with an initial commitment of $600 million, while Humana will own a small minority stake. Partners in Primary Care currently operates in Kansas, Missouri, North Carolina, South Carolina, Texas and Florida, and the new joint venture is expected to double its footprint over the next three years.
- VillageMD plans to acquire Summit Medical Group of Arizona, adding nearly 50 providers and six clinics to VillageMD's Arizona footprint. The clinics are expected to transition to VillageMD's primary care brand Village Medical later this year. "After two years of building a high-quality multispecialty practice to benefit the residents of the Valley, we believe that VillageMD's high-touch and effective clinical model, coupled with its technology platform, docOS, as well as their human capital resources, will help us provide world-class care to patients," said Kent Johnson, M.D., chief physician executive of Summit Medical Group Arizona.
- In South Florida, Cano Health acquired a portion of Primary Care Physicians of Hollywood, making Cano Health the largest primary care provider in highly saturated Miami-Dade and Broward counties. The acquisition will add 11 primary care medical centers to Cano Health's South Florida footprint. Cano Health's 73,000 patients will have access to wellness centers, arthritis and pain management and other comprehensive medical services.
- Digital health startups are attracting investors' attention, indicating market excitement around virtual care and value-based specialty care.
- Hinge Health, a San Francisco digital health startup that aims to treat chronic musculoskeletal conditions such as back and joint pain, secured $90 million in Series C funding. Founded in 2015, Hinge Health partners primarily with employers and health plans to provide wearable sensors, health coaching and an app to its users. Through technology and improved data, Hinge hopes to increase treatment adherence among users with chronic pain while reducing opioid utilization. According to Hinge Health CEO and cofounder Daniel Perez, Hinge Health has helped users avoid two out of three elective surgeries and reduce pain by 69% on average.
- Maven, a women and family health start-up that provides on-demand access for virtual care along with services such as breast milk shipping and fertility clinic referrals, raised $45 million in Series C. The round was led by Icon Ventures, with participation from existing investors Sequoia, Oak HC/FT, Spring Mountain Capital, Female Founders Fund and Harmony Partners. Individual strategic investors include actresses Reese Witherspoon, Natalie Portman and Mindy Kaling, and 23andMe cofounder and CEO Anne Wojcicki. It is one of the largest funding rounds for a female-led women's health care company. The new round brings Maven's total funding to $87 million. The company's CEO, Katherine Ryder, who is the parent of a two-year-old and a three-year-old, says that part of the funding will go toward launching Maven Pediatrics this year.
- Cigna Ventures invested in two digital health companies this month:
- Buoy Health uses artificial intelligence to provide personalized care recommendations based on a patient's symptoms.
- RecoveryOne connects patients to virtual, evidence-based care programs for musculoskeletal conditions.
- These two partnerships are preceded by several other recent value-based care announcements from Cigna, including a follow-on investment with Contessa Health, a provider of hospital-at-home services.
- Behavioral health startups are attracting new partnerships and funding as payers and employers continue to search for cost-effective ways to manage whole-person health.
- Quartet, a New York City-based startup, has partnered with Blue Cross and Blue Shield of North Carolina to implement a value-based payment model for mental health care. Last year, Blue Cross NC initiated its partnership with Quartet, offering its services to primary and mental health care providers at no cost. The expansion of this partnership will invite behavioral health providers to participate in Blue Premier, Blue Cross NC's current value-based payment model. Through this initiative, Blue Cross NC hopes to integrate behavioral health with primary care, improve network access and use telehealth more effectively.
- Starting this month, Cigna announced that its 14 million customers enrolled in employer-sponsored plans can securely schedule appointments online to see behavioral health counselors or psychiatrists by video or phone through its collaboration with telemedicine provider MDLIVE. This new service is in addition to Cigna's behavioral health network of more than 18,000 virtual providers.
- Spring Health, a mental health care platform, raised $22 million in Series A funding. The funding was led by Northzone, Equinox Ventures and Able Partners. Spring Health calls its approach "precision mental health care," in which users enter information that the software screens for several mental health conditions, including depression, anxiety, eating disorders and post-traumatic stress disorder. From there, Spring Health will pair the user with a mental health professional available to answer questions via text, phone or video. Spring Health was founded in 2016 and claims to work with the employees of more than 50 companies across five continents.
Payers and Providers
- One Medical surged in its first day of trading, closing at 58% above its initial stock price. The subscription-based primary care company sold 17.5 million shares, raising $245 million in the offering and bringing its valuation to about $2.7 billion. Currently, One Medical has 397,000 members and 77 locations, but its growth in membership has been accompanied by deepening net losses. In the first nine months of 2019, One Medical's net loss was $34.2 million.
- Cigna and Oscar Health are partnering to provide fully insured health benefits to small businesses, sharing risk equally under a reinsurance agreement. The partnership is set to launch in a few select markets in early 2020, with plans to expand over time. Oscar has previously partnered with Humana to offer insurance to small businesses in Nashville. The insurance plans will include integrated medical and behavioral services, along with a concierge team to help beneficiaries find care.
- CityLife Health, a value-based Medicaid provider, entered into a clinical affiliation agreement with Jefferson Health to provide cost-effective care to its Philadelphia-area Medicaid patients. CityLife uses walk-in visits as an opportunity to assess behavioral and social determinants of health and identify gaps in care, while leveraging its technology platform to provide a highly coordinated care plan for its patients. Through the new partnership, Jefferson Health hopes to proactively address its Medicaid patients' needs and reduce emergency department utilization.
Hospitals and Health Systems
- Four hospitals on Chicago's south side—Advocate Trinity Hospital, Mercy Hospital and Medical Center, South Shore Hospital, and St. Bernard Hospital—announced intentions to merge into a single health care system. If successful, the merger would be valued at approximately $1.1 billion and would create one new hospital and a network of community health centers. Through this potential merger, the four hospitals hope to address health inequities in the region, expanding access to primary and preventative care and investing in at least one state-of-the-art destination hospital to replace aging, underfunded facilities.
- Teladoc Health, a telemedicine company, announced plans to acquire InTouch Health, a provider of enterprise telehealth solutions for health systems, for $600 million. InTouch Health is expected to generate $80 million in revenue in 2019 and supports more than 3,600 care locations in the world, including many top health systems in the U.S. The acquisition positions Teledoc as an attractive partner for health systems looking to expand their virtual care strategy. Teladoc has experienced significant revenue growth over the last year and hopes the acquisition will strengthen its long-term growth potential.
Long-Term Support Services
- CareBridge, a new entity designed to improve the care for individuals receiving long-term support services (LTSS), launched after receiving more than $40 million in funding. CareBridge's services will include electronic visit verification, data aggregation, 24/7 member support and decision support to help determine the amount of home and community-based services that each LTSS member requires. "Over half of the dual eligible individuals in the country receive long-term support services," said former U.S. Senator Bill Frist, chairman of CareBridge's board of directors. "CareBridge offers a unique opportunity to significantly improve care for this vulnerable population, which is only going to grow as baby boomers continue to age."
Government & Regulatory
- CMS is granting additional flexibility to some Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs) that are at risk of owing money to Medicare because they have not hit spending targets for shared-risk patients. Guidance issued by CMS allows MSSPs with two-sided risk that have selected prospective payment to provide covered telehealth services at home without geographic restriction. "Applicable ACOs are those with prospective assignment for a performance year in the ENHANCED track (including existing Track 3 ACOs), BASIC track levels C, D or E, or in the Track 1+ Model," the agency said. The National Association of Accountable Care Organizations estimates that 20 percent of the 517 ACOs in MSSP can use telehealth more freely under the new guidelines.
- CMS released a proposed payment rule for Medicare Advantage and Part D plans, creating a new preferred tier for specialty drugs to drive more competition and rebates. Currently, all specialty drugs are the same tier with its own level of cost-sharing, while the proposed second tier would permit a lower percentage of beneficiary cost-sharing (either 25% or 33%, depending on whether the plan has a deductible). Under the proposed rule, plans will also be required to disclose pharmacy performance metrics such as generic drug utilization.
People on the Move
- Verily Life Sciences hired Deepak Ahuja, the former chief financial officer of Tesla, as its new CFO. "The health care industry, much like the transportation industry when I first joined Tesla, is on the cusp of a new wave of transformation," Ahuja said. "The combination of very diverse skillsets and vertical integration of innovative technologies puts Verily in a unique position to deliver on the shared goals of many: better, less expensive care for many people."
- Humana has hired Drs. Kate Goodrich and Mona Siddiqui, two former federal government personnel, to better integrate the insurance company's clinical efforts. Goodrich, who previously worked as the chief medical officer at CMS, will be the senior vice president of trend and analytics, while Siddiqui, the former chief data officer at HHS, will be the senior vice president of enterprise clinical management.
Evolent in the News
- In the January issue of Population Health News, Evolent Chief Nursing Executive Kate Rollins explains how the National Committee for Quality Assurance's new population health accreditation program is set to shake up the industry. This past fall, Evolent became the first organization to earn the three-year accreditation, which will replace NCQA's longstanding disease management accreditation program.
Survey Says/Studies Show
- A study in the American Journal of Managed Care found that machine learning models could accurately predict risk and utilization using only publicly available and purchased "socioeconomic determinants of health" data. A total of 138,115 patients were studied across three health systems in the United States. The decision tree-based machine learning approach was able to stratify patients' risk of hospital and emergency department utilization without interacting with the patient or collecting information beyond the patient's age, gender, race or address.
- On average, hospital mergers and acquisitions led to a patient experience that was moderately worse, while 30-day mortality and readmission rates were largely unaffected, according to an article in The New England Journal of Medicine. The cohort consisted of 250 hospitals acquired between 2009 and 2013, and the study compared them to nearby hospitals not involved in M&A transactions. In the three years before and after the acquisition, the study saw a lower patient satisfaction score on average, with the steepest drops occurring post-transaction. The only improvement the study saw among acquired hospitals was in clinical process, but the improvement was so incremental that the study was unable to link it to the acquisition itself.