Evolent Health rounds up recent value-based care news spanning policy, research, innovations, payers and providers. This month’s update covers developments in July and August.
Top Trending Themes
1. After a successful IPO, Oak Street Health continues its market expansion, launching its first retail partnership with Walmart.
- Oak Street went public Aug. 6 with a $328 million public offering. It exceeded its initial filing of $15-17 per share, as shares began trading at $21 and jumped to $40 by the end of the day. While Oak Street is a leader in a large addressable market of $325 billion and 27 million Medicare beneficiaries, the company has yet to be profitable, with an accumulated deficit of $369 million. "Our economic model is all about investing in our patients' care and investing in our communities," said CEO Mike Pykosz. "When you're growing at the rate we are and you're making those investments, it can lead to operating loss. But when we look at the economic potential of the model, we really try to look at 'What are our more mature centers doing? What is the care model and the impact on the patients who have been with us longer?' to get a sense of where we're going."
- Oak Street has partnered with Walmart to open three clinics in Walmart supercenters in the Dallas-Fort Worth area. The clinics will offer preventive primary care and urgent care services, with extended hours for walk-ins and same-day appointments. Oak Street's clinics will replace Walmart's own care clinics at three Texas stores in Arlington, Benbrook and Carrollton. This partnership is a deviation from both companies’ clinic strategies up to this point:
- To date, Oak Street has focused on caring for Medicare and dual-eligible patients in its 60 primary care clinics under value-based payment models. At its Walmart clinics, Oak Street will accept all types of patients (including children) as well as fee-for-service payment.
- Last year, Walmart announced its ‘health superstore’ strategy, under which it launched large, wholly owned clinics in Georgia and Arkansas, with other clinics soon to launch in Florida and Illinois. The partnership with Oak Street strays from this ownership model, an interesting development given that Texas has more Walmart stores than any other state.
2. New market entrants Alphabet and Amazon are focusing on their strengths—providing new technology and analytics-based solutions—while relying on partners for non-core expertise to launch new products.
- Alphabet's health care subsidiary, Verily, will partner with Swiss Re Corporate Solutions to create a new stop-loss insurance company. The new entity, called Coefficient, will use data analytics to help self-funded companies manage unexpected areas of cost, such as specialty drugs and high-cost therapies. Swiss Re Corporate Solutions will make a minority investment in Coefficient, subject to regulatory approval. Ivan Gonzalez, CEO of Swiss Re Corporate Solutions’ North America business, will join the company’s board.
- Amazon unveiled a new wearable health device, the Amazon Halo Band, which can send data directly into the Cerner Corp. electronic health record. Cerner customer Sharp HealthCare is the first health system to use the system. Amazon Halo comprises a wearable wristband that tracks wearers' exercise activity, heart rate, sleep and body fat percentage, as well as an app that analyzes users' data to provide health insights as part of a monthly subscription.
3. OneOncology, a national partnership of independent oncology practices, is poised for growth after securing additional provider and research partnerships to drive advancements in community oncology.
- A new partnership with Los Angeles Cancer Network (LACN) adds 18 providers and more than 2,500 lives to the OneOncology platform. With the addition, OneOncology has more than 470 providers caring for about 220,000 patients across the U.S.
- OneOncology also entered a research partnership with Foundation Medicine to provide precision medicine and genomic profiling to member practices’ oncology patients. Through their research collaboration, the two “will focus on accelerating molecular insights and patient care through the use of clinico-genomic datasets,” a press release stated. OneOncology will use its patient data to advance research and address gaps in knowledge about cancer treatments. The partners also will work together on clinical trial designs.
- Beginning in 2021, Oscar Health plans to offer a new option in which individual and family plan members in California, Florida, New York and Texas can receive all primary care services virtually. The primary care visit, along with generic and low-cost brand name prescription drugs, labs, diagnostic imaging and initial specialist visits, will come with no out-of-pocket costs. Members will also see the same primary care provider with each virtual visit. While Oscar was planning to roll out a virtual primary care program before COVID-19 hit the U.S., the pandemic and resulting explosion in telemedicine accelerated its plans.
- Clinic operator Marathon Health is opening medical clinics at several Tysons Foods plants to improve workers’ health and better protect them from the coronavirus. Most services at the clinic will be provided at no charge to employees and their families. Tyson Foods, which processes about 20% of all beef, pork and chicken in the U.S., said its plans to open the clinics was in the works before the coronavirus struck this year, but that they will also help the company respond to the pandemic. Tyson said it will initially set up clinics near seven of its plants, including in Storm Lake, Iowa, and Holcomb, Kan., in a pilot program, but has yet to announce other locations.
- Tandigm Health partnered with Gateway Medical Associates to form Tandigm Physician Services, a management services organization that provides advanced capabilities for Philadelphia-area independent primary care physicians in value-based care arrangements. “Tandigm has proven that we can help patients stay healthy and improve quality if we empower the providers and clinicians on the front lines with the right data, tools, incentives and support systems," said CEO Frank Ingari. "Partnering with Gateway Medical Associates to launch Tandigm Physician."
- For the second consecutive year, Cano Health is ranked as the fastest growing primary care provider in the country, with a growth rate of 7,000% over three years. Cano was recognized by the annual Inc. 5000 list, which highlights the country’s fastest-growing private companies. "Despite the many challenges we have faced this year in the wake of the COVID-19 pandemic, Cano Health was able to immediately pivot and innovate to deliver the best care for our patients," said Dr. Marlow Hernandez, Cano Health's founder and CEO. "By adapting and stratifying our proprietary population health system to acutely identify and treat our COVID-19 patients, we have attained clinical outcomes that are significantly better than the Florida state average.”
- Anthem HealthKeepers Plus, Anthem Blue Cross and Blue Shield in Virginia’s Medicaid plan, have partnered with Fortify Children’s Health to provide value-based care to more than 25,000 pediatric Medicaid members in Virginia. Through the program, Fortify providers will have access to care coordination tools and timely analytics to identify gaps in care and provide targeted support to their patients.
Specialty Care Management
- Strive Health, a specialized kidney care company, and Humana have partnered to provide kidney disease care coordination services to Humana Medicare Advantage and commercial beneficiaries in Kentucky and Indiana. The agreement aims to improve health outcomes for members with chronic kidney disease and end stage renal disease by leveraging predictive analytics technology, telehealth services and home dialysis education and training.
- Home-based care provider DispatchHealth announced that, over 12 months at one of its health system clients, it had diverted 65% of patients from the emergency department, yielding an average of $1,509 in savings per patient. In 2018, DispatchHealth began working with Tacoma, Wash.-based MultiCare, to reduce the overall cost of care in its network. DispatchHealth works with payers, providers, health systems and others to deliver care in the home, deploying medical teams that are available seven days a week via a phone call or request via mobile app. Most patients with insurance pay anywhere from $5 to $50 for its services.
- Allina Health and Blue Cross and Blue Shield of Minnesota (Blue Cross) announced a six-year, value-based payment agreement between the two organizations. The new agreement aims to reduce the cost trend of Blue Cross-specific care at Allina Health by 10% over five years. Blue Cross is Allina Health's largest payer, and Allina Health is Blue Cross' largest provider of care for its Minnesota members. Altogether, Allina Health and Blue Cross believe this agreement will positively impact the cost and quality of care for about 130,000 people.
- Rush University System for Health (RUSH) and R1 RCM Inc., a technology-enabled Revenue Cycle Management (RCM) services provider, partnered to launch a joint Innovation Lab. Through the Innovation Lab, R1 will be able to invest resources in developing new solutions and making existing resources available to other health systems across the country. The two organizations hope to commercialize the Innovation Lab solutions sometime in 2021.
- The Cleveland Clinic is partnering with CVS Health subsidiary Aetna to form a new accountable care organization (ACO), and the two companies plan to launch a co-branded insurance plan this fall. Aetna and the Cleveland Clinic claim their combined plan will be able to save employers 10% compared to Aetna’s current broad network plans. The new plans, called the Aetna Whole Health – Cleveland Clinic plan, will be available this fall to companies in Northeast Ohio. Aetna members will be able to receive care at any of the Cleveland Clinic’s facilities or its network of affiliated physicians.
Government & Regulatory
- President Trump signed an executive order to implement the Community Health Access and Rural Transformation (CHART) Model, which aims to improve care quality and increase access to rural health care systems. “CHART will empower rural communities to develop a system of care to deliver high quality care to their patients by providing support through new seed funding and payment structures, operational and regulatory flexibilities and technical and learning support,” stated the Centers for Medicare & Medicaid Services (CMS) in a press release. The main goals of CHART are to increase financial stability through capitated payments, to reduce regulatory burdens for providers, and to enhance access to health care services through addressing social determinants of health.
- CMS and the Trump administration released a proposal to change how hospital star ratings are calculated, aiming to make the process simpler to understand and explain. Currently, star ratings leverage latent variable modeling (LVM), which combines and summarizes multiple data points to come up with a composite star rating. The proposed rule would eliminate the use of LVM, instead adopting an average of measure scores to calculate measure group scores. Providers and hospital groups such as the American Hospital Association (AHA) have advocated for a less complex methodology, saying the current process is difficult to explain to providers and patients and is difficult to use for identifying areas for quality improvement.
Evolent In The News
- Evolent reported that hospitalizations and medical spend were significantly reduced for high-risk Medicare beneficiaries in its care management programs. Among “high-fidelity” patients-—those most engaged in the program—readmissions were 47% lower and medical spend was 42% lower than equally high-risk patients who did not participate.
- Dr. Mark Epstein, CEO of Evolent’s True Health New Mexico business, was recognized as a top CEO by the Albuquerque Journal. He was the recipient of both the Leadership and Excellence awards in this year’s program.
- Evolent was among 10 health care companies and 35 overall named on the Best Companies for Women to Advance list by Parity.org. The list recognizes organizations that have implemented a mix of exemplary benefits, policies and programs that ensure women have significant opportunities to advance their careers.
- Evolent Vice President of Health Policy Ashley Ridlon and McDermott+ Consulting's Mara McDermott write in Bloomberg Law about how the COVID-19 pandemic is making a case for the move to value-based care, and how policymakers can improve incentives to support this transition.
Evolent Partner News
- Dr. Lori Sieboldt, medical director of population health with Evolent ACO partners at Deaconess Care Integration, was named on the Modern Healthcare Top 25 Innovators list. Sieboldt is tackling gaps in care for vulnerable populations, addressing social determinants of health, and helping Deaconess consistently rank among the top-performing Next Generation ACOs.
Survey Says/Studies Show
- According to The State of Population Health: Fifth Annual Numerof Survey Report, only 16% of survey respondents have 40% or more of their revenue in risk-based agreements. Yet, two years ago, nearly a third of respondents expected to meet that goal by 2019. According to the report, in each previous year the survey was conducted, "respondents predicted a dramatic increase in the percentage of annual revenue that would be at risk in the next two years; however, actual progress has failed to keep pace with expectations.” The greatest barrier to progress is the potential for financial loss. Approximately 1 in 5 respondents cited the threat of financial loss as the primary reason they have not moved to a risk-based model. Other concerns include issues with systems like IT, tracking and management (15%); uncertainty about when to make the transition from the current model (13%); difficulty in modeling the cost of care across the continuum (10%); and difficulty changing the organization’s culture (9%).
People On The Move
- HHS Chief Information Officer José Arrieta resigned in mid-August after 16 months on the job, saying that he wanted to spend more time with his children. His office has been under fire since mid-July when HHS announced that it would collect daily COVID-19 information from hospitals instead of the CDC, a decision that led to widespread concerns about the integrity of COVID-19 data reporting and sparked several congressional investigations. At the time of his announcement, Arrieta planned to continue to serve as CIO temporarily to ensure a smooth leadership transition.
- Walgreens has added former Rite Aid CEO John Standley as president of its U.S. business. The news comes a month after Walgreens announced that CEO Stefano Pessina would step down and become executive chairman once the drugstore chain finds a replacement for him. Walgreens also said last month that it plans to add primary-care clinics to as many as 700 of its U.S. stores over the next few years in a major expansion of the care it offers customers.
- Nicole Cooper joined Lyft as head of health care policy. Most recently, Cooper was vice president of corporate social responsibility at insurer UnitedHealthcare. During the Obama administration, Cooper served as a policy adviser to the chief of staff at CMS and the deputy assistant secretary for minority health. As part of Lyft, Cooper will develop the company's national and state health care policy agenda, with an emphasis on its non-emergency medical transportation efforts. In addition to working with CMS and state agencies, Cooper will also work on the company's initiatives targeting health care disparities.
- SelectHealth, the not-for-profit insurer owned by Salt Lake City-based Intermountain Healthcare, named Mike Cotton to be its next president and CEO, starting in mid-November. A former regional president with Evolent, Cotton is currently CEO of Providence Health Plan, the insurance arm of Portland, Oregon-based Providence St. Joseph Health System. He replaces Patricia Richards, who is retiring from SelectHealth at the end of this month.
- Geisinger Health named Mark McCullough chief financial officer and chief operations officer of Geisinger Health Plan. McCullough replaces Kurt Wrobel, who became president of the health plan in June after Steve Youso retired. McCullough was previously vice president and CFO at Humana Pharmacy Solutions, Humana’s pharmacy benefit manager.