The time is right for joint ventures.
Concord's Relevant Health Roundtable hosted a panel on innovative joint ventures and acquisitions in healthcare.
The role of payers and providers is changing in the healthcare ecosystem as the two forces continue to innovate. We’re seeing unique partnerships, surprising alliances, and new methods of operation.
The Time is Right for Joint Ventures
- Joint ventures align incentives, enable different sources of revenue, and leverage expertise of various portions of the ecosystem to better care for the population.
- Partnerships are more likely to improve member experience and reduce total cost of care than consolidation and M&A activity. The administration of process is smoother and friendlier for members in the event of a joint venture and there are guarantees around outcomes.
- Aetna has five different joint ventures across the country, North Memorial announced a partnership with BCBS-MN a year ago in January, and Wellmark currently has a joint venture with MercyOne.
Making a Joint Venture Successful
- Before taking on any joint ventures, it is critical to think through the patient/member experience and design plans with them in mind.
- An organization’s culture drives the success of ACOs (Accountable Care Organizations) and leadership buy-in has the ability to make or break a partnership.
- Designate key performance indicators for your joint venture. Wellmark utilizes the 3M Value Index Score (VIS) to measure population health. This single, holistic score quantifies how well a provider takes care of his or her entire patient population within a primary care system.
- Tracking the right data is key to a successful joint venture. For instance, it’s not enough to know who hasn’t received services – you need to understand In one real life example, a member had 36 preventable ED visits, but she was in a socioeconomically challenged region.
The Pitfalls of Success, Scaling, and Actionable Data
- The first three years post-joint venture often see significant improvements made, but then it’s challenging to live up to those expectations in subsequent years and show further improvement.
- Scaling can be difficult and needs to be handled thoughtfully. Leaders need to consider the resources necessary to innovate and how to grow membership when the scale is small.
- Most companies have no shortage of data, but they struggle to find the right people to analyze that data and convert it into actionable information.
Acquisition Over Partnership
- With CVS Health’s acquisition of Aetna, we see a unique precedent set for the backwards absorption of health plans by other companies.
- Since 87% of Americans live within three miles of a CVS retail store, CVS Health plans to leverage their acquisition by creating HealthHUBs and expanding minute clinics to address gaps in care.
Joint ventures show no signs of slowing down as healthcare payers and providers alike look to diversify their offerings and design better programs for their members and patients. We expect to see more unique acquisitions and partnerships announced in the next few years.
North Memorial Turns to Elder-Care Provider. In partnership with LifeSprk, North Memorial’s latest care coordination program helps address the needs of elderly patients by offering screenings and solution guidance.
To Be More Data Driven, Look for the Right Business Partner. Most companies lack either the tools or quality data needed to generate actionable insights. This article from Harvard Business Review suggests that it makes sense to pool resources.
CVS’ First HealthHUBs Driving More Prescriptions, Clinic Visits. CVS and insurer Aetna first touted the hub concept as an entry point to the healthcare system – now the company plans to roll out 1,500 HealthHUBs in stores by the end of 2021.