Value-Based Care News Digest - February 2021

February 19, 2021

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 

1. Capital continues to flow into companies building and supporting value-based primary care from a variety of angles.   

  • Big box partnerships
    • Walgreens accelerated its $1 billion investment in VillageMD to open 600 to 700 primary care clinics, many of which will be in underserved areas. When the investment was first announced in July 2020, Walgreens planned to make the investment over three years, but under the renegotiated terms it was completed in January. 
    • Meanwhile, Walmart and Oak Street Health recently opened clinics at three Walmart supercenters in the Dallas-Fort Worth area, bringing it to eight total centers in Texas. 
  • Owned primary care
    • Medicare Advantage (MA): Partners in Primary Care, a Humana subsidiary, plans to open 20 more clinics in Texas, Louisiana, Georgia and Nevada focused on senior-specific primary care, with the intention to be payer-agnostic. This expansion will bring the company to 80 total locations nationwide.
    • Medicaid: AbsoluteCare, a value-based provider focused on chronically ill and vulnerable patients, received a $105 million investment that will allow it to provide additional interventions such as behavioral counseling and patient outreach.
    • Commercial/MA: Village MD recently announced expansions into Chicago and Houston, bringing the company to 48 clinics nationwide. VillageMD continues to grow through partnerships and acquisitions with local practices.
  • Affiliated Models
    • Equality Health announced a strategic investment from General Atlantic, a global growth equity firm, to help grow the company’s value-based primary care network serving the Medicaid, Medicare and ACA populations.
    • Apollo Medical Holdings, a health care management company, announced its strategic alliance with CAIPA MSO. The partnership is Apollo’s first national expansion effort and will further its mission to help physicians deliver higher quality care.

2. Companies are increasing their focus on improving care for patients with chronic conditions through innovation and expansion of key offerings for specific populations.

  • Centene announced its acquisition of Magellan for $2.2 billion. The deal is said to help Centene establish the nation’s largest behavioral health platform. It will also help the company further build out its specialty care business, allowing Centene to enhance care for patients with complex conditions.
  • BCBS of North Carolina unveiled its Advanced Kidney Program in partnership with Strive Health and Fresenius. The program will work with primary care providers and nephrologists to identify gaps in care and improve quality for Medicare Advantage members with chronic kidney or end-stage renal disease.
  • Sitka, a startup offering a virtual specialty care provider network, has raised a $14 million Series A to accelerate its product development and expand growth with new and existing partners. 

3. Payers and payer administrative services heat up.

  • Following Clover Health’s blank-check IPO in October, Oscar Health confidentially filed to go public after its latest $140 million funding round. 
  • Signify Health, a value-based care platform, in January announced its initial public offering. The company indicated that COVID-19 had increased the market for in-home health evaluations, leading to significant growth. The IPO on Feb. 8 raised $564 million

4. Fold or double-down? Solving health care’s toughest challenges has proven harder and more complicated than expected..

  • Haven—the Amazon, Berkshire Hathaway, JP Morgan health care company developed to lower costs and improve outcomes—announced it would shutter just three years after its formation. While the company made some progress  identifying a wide range of potential solutions, the implementation of those solutions across three very different companies became challenging.
  • Meanwhile, Verily, Google’s life science arm, raised $700 million in December to help advance its work in population health, clinical care delivery and chronic disease management.

5. Telehealth continues its tear. Cash continues to flow into companies seeking to launch or expand their telehealth service offerings.

  • Hinge Health, a musculoskeletal health company offering virtual preventive, acute, chronic and rehabilitative services, raised $300 million, making it the most valuable startup in digital health at $3 billion. The company offers virtual care for back and joint pain and has developed clinical care models for prevention, acute pain, chronic pain and surgical rehabilitation.
  • Accolade, a health benefits platform for employers, is acquiring 2ndMD, a telehealth company providing second-opinion services to employers. The company boasts large savings when it comes to surgical consultations, and the acquisition will allow Accolade to expand offerings for its members. 
  • Everlywell, an at-home lab diagnostic company, raised $175 million to support the expansion of its telehealth offerings for chronic disease management.
  • GoodRx announced that it is expanding its service offerings to include telehealth and free mail-order pharmacy delivery for those with a subscription. Subscribers will now be eligible to receive telehealth care for 150+ conditions and receive up to 90% off on prescribed medication.  

6. Payers miss the mark on MLR: The costs of COVID-19 treatment and diagnosis appear to be canceling out expected savings from decreased utilization. 

  • Molina announced higher than expected MLR, coming in at 90.8% in Q4, a 4.8% increase from the prior year. The company also announced Q4 net income of $34 million a $134 million decrease from Q4 2019. The company indicated that Medicaid refunds to states made the biggest impact on their bottom line.
  • Centene also announced higher than expected MLR in Q4 reporting 88.4% which is the same percentage it delivered in Q4 of 2019. 

Industry News

  • Anthem has launched a digital incubator aimed at providing the company access to the latest health care technology. The incubator will provide mentorship and financial backing to ensure technologies are developed with the payer, provider and consumer in mind.
  • Oscar Health is partnering with Health First Health Plans to provide members with access to Oscar’s 24/7 virtual urgent care, personalized care teams and other features of its technology platform in an effort to provide more affordable, higher quality care to members in central Florida.
  • Optum announced its acquisition of Change Healthcare, a technology company with a platform that manages revenue, payment cycles, and clinical information, for $7.84 billion. The deal is said to help simplify financial interactions by leveraging Optum’s advanced data analytic capabilities. 
  • Walgreens is developing a new patient platform that will help customers find and obtain managed care. The platform will have an element of personalization to allow for better management of care across stakeholders.
  • Gateway Health and Bridges Health Partners have entered into an accountable care organization partnership aimed at enhancing quality of care using data insights and value-based programs.
  • ConcertoHealth and Perfect Health have combined under one company name, Concertocare. Both companies have historically focused on providing value-based care to seniors using an in-home and telehealth care model.
  • Story Health, a startup company founded by a Verily co-founder, raised $4 million in seed funding to support its virtual care platform for specialists.
  • Six orthopedic practices have joined forces to launch OrtoLoneStar, a fully physician owned, and operated practice dedicated to delivering quality, cost efficient care to patients. The company plans to continue expanding within Texas by adding new providers and locations, further solidifying its commitment to independent, community-based practices.

Government and Regulatory

CMS

  • CMS announced that it will allow Medicaid managed care organizations to partake in its new Direct Contracting model for beneficiaries eligible for both Medicaid and Medicare. The new model is expected to provide a more integrated care system to help lower costs and improve quality of care.
  • In early January CMS announced its approval of the country’s first block grant plan to be piloted in Tennessee. The plan provides a fixed budget target and an opportunity for shared savings to reduce unnecessary costs while supporting the increased enrollment. The pilot is expected to start immediately and last for 10 years.

Federal

  • The FTC has launched a study evaluating the impact of physician consolidation on market competition over the past six years. From 2016 to 2018, hospitals acquired 8,000 medical practices, and 14,000 physicians left their practices to join the hospital workforce. It is expected that COVID-19 has increased this trend, given the financial challenges practices are experiencing.
  • As of Jan. 1, consumers can expect their hospitals and providers to disclose payer-negotiated payment rates for over 300 services, allowing them to “shop around” for their care. CMS has announced that it is prepared to enforce this rule, indicating that those who do not participate may be subject to noncompliance penalties.
  • After much controversy, Congress revised the Medicare physician fee schedule to eliminate the specialty care cut and give all providers a 3.75% pay increase in 2021.

Evolent News

  • Five Next Generation Accountable Care Organizations that Evolent supported in 2019 earned a combined $84 million in savings for Medicare, receiving shared savings payments of more than $66 million. These ACOs achieved a combined 5.3% average savings, compared to 3.8% among other ACOs.

People on The Move

  • UnitedHealthcare announced the retirement of its CEO, David Wichmann and appointment of Andrew Witty as his successor. 
  • CVS added a new C-suite leadership role, the chief customer officer, that will be led by Michelle Peluso, most recently chief marketing officer for IBM.
  • Spiras Health named Evolent alum Scott A. Bowers as chief executive officer.
  • Welsh Carson hired OneOncology CEO Tracy Bahl as an operating partner.
  • SOC Telemed has promoted its CFO and COO, Hai Tran, to president, and hired Chris Knibb as CFO.

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