Feeds:
Posts
Comments

Posts Tagged ‘Aetna’

Each day, in the U.S. alone, over 4000 more people are diagnosed with cancer. In 2010, there were 13.8 million cancer survivors alive and some 18.1 million people in the U.S. are expected to be living with cancer by 2020 (Journal of the National Cancer Institute).

Of the nation’s 10 most expensive medical conditions, cancer is the highest per-person price medical condition.  Medicare data and other sources show that in 2010, care for the 16 most common types of cancers in U.S. women and 13 common types of cancers in U.S. men costs the healthcare system $124.6 billion.

Correlating Cost Increases and Survival Rates:

With the escalating cost of living with cancer and the increase in cancer survivors, technologies and services are evolving to help individuals live with cancer longer, happier, and cheaper.  Cancer is becoming an area of focus for payers to lower the cost of care and improve patient outcomes.

Health plans have begun pilot programs with Biological Management Companies (BMCs) to assist in oncology treatment.  The traditional oncology medication management approaches are evolving and payers are looking to reduce inappropriate drug utilizations and inefficiencies in distribution without impacting quality.

According to market research company HIRC, two-thirds of plans will have clinical pathways for high incidence cancer conditions by 2012.  There are numerous payers currently piloting with BMCs to help develop decision tools, medication management, and physician reimbursement schemes. A few recent pilots include:

  • Aetna with US Oncology and P4 Healthcare
  • BCBS of Florida and Coventry with iCore Healthcare
  • BCBS of NJ with Via Oncology / PathForward
  • CoreSource and Employee Benefit Management Corp with Biologics
  • Highmark and AmeriHealth with P4 Healthcare
  • Humana with New Century Health

Payers aren’t the only ones concerned about cancer costs.  Employers rated cancer as the number one specialty area of concern in a recent survey by HIRC.  Specialty Pharmacy Programs for the management of oncology medications continue to rise with 60% expecting to use them by 2015.  Specialty pharmacy providers (SPPs) have begun to offer oncology-specific services, including oversight of distribution and tighter management of supportive care products.

As payers and employers continue to form strategies and evolve payment methodologies for cancer, healthcare IT companies are making their bets on this high cost area:

The potential costs continue to escalate with direct cancer care expenditures expected to reach $158 billion in 2020.  We are continuing to watch this market as new players emerge and global healthcare services and technology vendors seek to lower cost and improve outcomes for cancer patients.

Let us know what you think!

Joanna Roth

Joanna Roth is a Senior Analyst at TripleTree covering the healthcare and technology industry, specializing in education solutions. Follow Joanna on Twitter or e-mail her at jroth@triple-tree.com.

Read Full Post »

A few months ago, we noted that the release of regulations for ACOs would trigger an ACO services race across the healthcare landscape, where market participants would be sprinting to create service offerings that would help hospitals and physician practices become compliant with the CMS ACO regulations for sharing financial risk and the rewards.  So where do things stand six months later?

Just like earlier this year, the “Big Two” – Optum and Aetna – seem to be squarely in the lead of creating a turnkey ACO solution.  And in the last few weeks, we’ve seen a couple items of note from these two.  The first was an interview with Charles Kennedy, CEO of Aetna’s ACO division on HISTalk.  In the interview, Kennedy talks about how Aetna is pursuing the ACO opportunity via three go-to-market offerings:

  • Clinical integration (basically an HIE via Medicity)
  • A population-based approach with chronic disease management tools that typically rolls out to hospital employees as a way of deploying a light version of an ACO
  • A full, private-label health plan, where a delivery system has their own health plan “powered by Aetna”

Last week, Optum announced that it has brought together its own ACO division with more than 700 people (!) focused on enabling “Sustainable Health Communities,” which is Optum’s version of the ACO concept.  Optum’s press release calls out its own five-part strategy:

  • Patient and population health management
  • Informatics, analytics, and technology
  • Clinical integration, network development, and physician change management
  • Payment model, contracting, and actuarial expertise
  • Operating expertise

Interestingly, the press release also mentions that Optum is also bringing solutions to market targeted at commercial health plans and government payers – the other side of the ACO/shared risk/bundled payment equation.

The big question we have been trying to figure out here at TripleTree is who is going to follow “the Big Two” and their industry-leading ACO partnership announcements (specifically: Optum with Tuscon Medical Center and Aetna with Carilion Clinic)?  Where are the other healthcare companies that are going to pursue this mammoth opportunity?  Wellpoint’s acquisition of CareMore, McKesson’s acquisition of Portico, and Harris Corporation’s acquisition of Carefx certainly point to their interest in this market, as does Premier’s burgeoning alliance with IBM – but we have yet to see any of these or other players signal their interest in developing a broader set of provider-focused bundled payment service offerings.

This past week we think have finally seen another company unequivocally throwing its hat in the ring:  The Advisory Board Company announced the creation of a new company called Evolent Health, in partnership with the UPMC Health Plan.  Evolent intends to provide a platform for population and health plan management to leading health systems as they develop their value-based care strategies.  This follows ABCO’s earlier acquisitions of Crimson, Concuity, and Cielo MedSolutions – all earlier signals that the company was pursuing the hospital analytics, contracting, and registry marketplaces in a big way.

It makes perfect sense for The Advisory Board to do this – with nearly unparalled access to hospital c-suites across the country, it was only a matter of time before they launched a solution to address the many, many requests they must be getting to help with hospitals’ new risk-sharing strategies.  We see this as a welcome development in this space, and hope to see other HCIT players, undoubtedly facing their own questions from their healthcare clients, enter the fray as well.  Where are you, Accenture, Microsoft, and Elsevier?

Let us know what you think.

Conor Green

Conor Green is a Vice President at TripleTree covering the healthcare industry, and specializing in revenue cycle management and tech-enabled business services. You can email Conor at cgreen@triple-tree.com.

Read Full Post »

CIGNA put a stake in the ground for the long term prospects of Medicare Advantage (M.A.) with its recent announcement that it would be acquiring HealthSpring for $3.8B (a 37% premium over its closing price prior to announcement).

HealthSpring primarily operates as a M.A. plan covering over 340K lives across 11 states (including over 800,000 Medicare Part D members).  CIGNA previously had a very limited presence in M.A. with ~44,000 lives entirely in Arizona.

CIGNA has been focused on diversifying its core US healthcare presence, so the move isn’t too much of a shocker, although many thought its approach would include international expansion versus a bold move into the government market.  It’s likely the HealthSpring business model was too alluring for CIGNA to pass on when you consider HealthSpring’s:

  • Tight integration with network physicians including a high level of capitation and risk sharing;
  • Strong leadership team lead by Herb Fritch whom possess the experience and know-how to operate a unique, physician-centric, coordinated care model; and
  • Consumer brand presence within the senior market.

There is a large opportunity for CIGNA to leverage and replicate HealthSpring’s coordinated care model across their commercial book of business to drive efficiencies and deliver better care.  Additionally, CIGNA will benefit from its ability to cross-sell HealthSpring into new markets.

CIGNA is not the only health plan making moves in the M.A. market – recent M&A activity within the sector over the past 18 months include:

HealthSpring was one of the few remaining M.A. plans with size and scale, and CIGNA’s move could prompt additional consolidation within the sector over the coming 12-18 months.  The list of targets with viable M.A. populations (100K+ lives) is becoming quite limited.  Some of these include Universal American and Wellcare, public M.A. plans with 100K+ lives; and XL Health, SCAN, Aveta and Universal Healthcare as examples of private M.A. plans with scale.

There have been recent headlines about increased pressure on reimbursement rates and minimum medical loss ratio (“MLR”) requirements posing a threat to the future of M.A.  My view, however, is that M.A. will not only survive, but thrive going forward and recent M&A activity would suggest the same.  Let me know what you think.

Judd Stevens

Judd Stevens is an associate at TripleTree covering the healthcare industry, specializing in the impacts and transformation of health plans in a post-reform world.  Follow Judd on Twitter or e-mail him at jstevens@triple-tree.com.

Read Full Post »

As congressmen and stakeholders across the country continue to debate the best methods for quality improvement and cost containment in the U.S. healthcare system, four of the nation’s largest health insurers have come together to provide access to data that has the potential to significantly bend the cost curve.

A long awaited announcement came last week from  AetnaHumana, Kaiser Permanente and UnitedHealth Group  revealing that they will be providing access to over 5 billion de-identified claims from over 5,000 U.S. hospitals totaling $1 trillion of healthcare costs incurred since 2000. This data will be made available to researchers and distinguished healthcare economists via the newly formed nonprofit group, Health Care Cost Institute (HCCI).

According to the HCCI web site, its mission is to promote independent research and analysis on the causes of rising US health spending, to provide policy makers, consumers, and researchers with better, more transparent information on what is driving health care costs, to help ensure that, over time, the nation is able to get greater value from its health spending.

Last week I spoke with Dr. Stephen T. Parente, PhD., Professor in the Carlson School of Management at the University of Minnesota and member of the governing board of HCCI. He described the multi-stage approach of the HCCI which includes collecting and aggregating data from the participating private insurers and establishing a database for entities interested in getting a handle on health care costs and utilization.  The HCCI is also designing “rules of the road” related to research protocols, access and review..

Until now, claims data has been limited to federally provided data on Medicare. But with over half of healthcare expenditures coming from private pay insurers, this restricted view hasn’t been broad enough to draw meaningful conclusions.   As its content evolves, the HCCI will publish a bi-annual scorecard to help researchers identify trending information at levels of detail rarely (if ever) seen before.

We’re actively working with healthcare innovators, many of which are working toward the same healthcare cost-saving goal,, and thought it would be useful to list our view of where  we predict the HCCI could (in the near term) positively impact payers, providers and patients related to healthcare cost and quality:

  • Develop evidence-based care recommendations and best practices (Providers and patients)
  • Design multi-payer quality improvement strategies and evaluate their effectiveness (Payers and patients)
  • Understand key bottlenecks along the care continuum where patients spend the most time and dollars (Payers and patients)
  • Determine specific diseases, conditions and treatments that are driving the largest cost trends (Payers and patients)
  • Identify the most cost-effective providers and medical procedures as well as geographical variations (Payers and patients)
  • Isolate cost variances between Medicare/Medicaid and private health plans and help appropriately align pricing with private pay (Taxpayers)
  • Analyze healthcare cost trends over time at an heightened level of specificity (Everyone)
  • Evaluate the effectiveness and draw comparisons between different types of disease management programs and treatment procedures(Payers, providers and patients)

Our long term outlook on the value of this data is that it can create new metrics of clinical and care performance standards based largely on historical and real-time reporting on claims. We’re hopeful that as such analyses are developed and recognized on a broader stage, they will be used to inform policy on a much more direct basis and make a huge impact on the costs of healthcare.

Have a great week.

Emma Daugherty

Emma Daugherty is a Senior Analyst at TripleTree covering the life sciences sector with a focus on provider technologies and patient safety.  You can contact her at edaugherty@triple-tree.com.

Read Full Post »

The U.S. healthcare industry is undoubtedly going through one of the most pronounced transformations in its history.  At the most fundamental level, the means and methods by which patients, providers, and payers interact is changing dramatically.

  • Consumers (patients) are increasingly at the epicenter of the healthcare delivery and decision making processes.
  • Providers (hospitals, clinics) are mobilizing to take advantage of new delivery models that assume the accountability for the quality and cost of healthcare for a defined population, the long-term goal of the ARRA legislation (health reform).
  • Payers (health plans) are expanding their focus beyond a traditional coverage and benefits orientation to include advanced health management and decision support capabilities.

For innovators and investors, these structural changes in conjunction with the ongoing trend toward more granular clinical documentation and code sets (i.e., the new HIPAA 5010 standards and transition from ICD-9 to ICD-10) as well as the lure of billions in financial incentives related to complying with HITECH/Meaningful Use rules are creating brittle calculus for valuing technological advancement and innovation.

In many respects the U.S. health system has been caught flat-footed by a wave of long-overdue regulatory mandates aimed at dragging an industry long resistant to change into the twenty-first century.  The impending need for innovative healthcare IT solutions has created substantial demand for forward-looking vendors with the capability to provide greater efficiency and quality within the care delivery continuum and/or improve transparency within healthcare’s convoluted reimbursement system.  Companies with these general characteristics are rare and truly valuable.

When taken together, the combination of pent-up demand and a scarcity of viable alternatives create a “bubble-like” atmosphere where valuations have crept well outside their historical bounds.  Leading healthcare IT vendors are experiencing unprecedented interest from a range of potential acquirers that fall into three broad categories:

The flurry of activity has resulted in a sellers’ market in which revenue multiples (computed as enterprise value divided by trailing twelve months revenue) have exceeded 8-9x.  This begs the question: is healthcare IT in a bubble?  The answer would be unequivocally “yes” if it weren’t for a range of trends that will persist for the next 10-20 years:

  • 78 million Baby Boomers are reaching retirement age
  • Over-utilization and high cost prescription drugs and medical procedures are not proving to be cost-effective
  • Increasing incidence and complexity of chronic and co-morbid conditions.
  • Healthcare, as compared to most other industries is in infancy in terms of technology adoption – creating a long-standing demand for IT implementation, integration, and optimization
  • Need for new and creative approaches to funding the rising cost of healthcare in light of the strain put on the Medicare and Medicaid entitlement programs
  • Prevalence of fraud, waste, and abuse within the administration and reimbursement processes

A constantly replenishing pipeline of new, entrepreneurial companies is fueling the pioneering spirit and innovation required to advance and redefine the U.S. healthcare system.  Any resemblance to a “bubble” is snuffed out by the sustainability of the current demand and expanding interest from the nation’s leading entrepreneurs, business builders, investors, and advisors that will continue to be attracted to solving healthcare’s complex, long-standing problems.  All in all, it’s a great time to be an innovator in healthcare.

Let us know what you think.

Seth Kneller

Seth Kneller is an Associate at TripleTree covering the healthcare industry, specializing in revenue cycle management, clinical software solutions, geriatric care and healthcare analytics. Follow Seth on Twitter or e-mail him at skneller@triple-tree.com.

Read Full Post »

With the proposed rule from the HHS and CMS finally released today for public comment, reactions and analysis will grow in the coming days on what it all means for healthcare providers.  We thought it made sense to offer some perspective on how we’re viewing the evolving opportunities for innovators, their investors, and their partners.

While integrated delivery networks (IDNs) and other large provider groups will have plenty to sort through to determine the tradeoffs of seeking accountable care organization (ACO) status, a number of researchers are already digging into the thorny issues surrounding ACOs to help develop standards, best practices, and collaboration between different models that are likely to spring up in the wake of health reform.  See this and this as examples.

What is most interesting to us so far is the jockeying of HIT vendors to reposition themselves as experts to the developing ACO marketplace.  While there are a number of ways to think about this – and our thinking is evolving pretty much daily – we see a few targeted areas where vendors are going to play.  None will be able to offer anything close to the end-to-end ACO functionality that several claim in their marketing materials.

Our view on the rapidly developing market for ACO services follows:

  • Creating the ACO:  Provider groups will require help sorting through those 1,000 pages of regulations, and we are already seeing opportunities for large, healthcare-focused consulting and implementation firms that have the ear of the hospital CEO to help steer the design and creation of these models. Companies like Accenture, IBM, Deloitte, Dell/Perot and the Advisory Board are being asked questions every day by their clients about ACOs – and at least one have already started to work on their own solution.  Partnerships with these consulting firms will aid adoption for vendors downstream in the areas below

  • Enabling the ACO:  The clinical integration of the ACO is the area of hottest focus right now – transactions in this space clearly demonstrate this.  HIE and interoperability vendors Axolotl, Medicity, and CareFX have all traded in the past 12 months.   Payers like UnitedHealth and Aetna have placed their bets on HIEs as the backbone on which clinical data will be integrated.  For provider networks looking to challenge this paradigm, the recent wave of physician practice acquisitions by hospitals and/or the subsidization of a single EMR system in an area (Minneapolis is largely an Epic market, for example) indicate that there may be another approach to achieve clinical integration.

  • Optimizing the ACO:  Once an ACO is established, the network of providers will need plenty of technological capability:  decision support and evidentiary guidelines, contracting and risk tools, compliance reporting, and performance benchmarking analysis among them.  Many companies already providing these services to health insurers are sprinting to reposition themselves as experts for the provider community as well – visit the home page of any formerly payer-focused software vendor as proof.  Market interest in companies participating in this space is heating up.

  • Marketing the ACO and Engaging with the Patient:  In our view, this is an overlooked area so far and will eventually be key to closing the loop on the ACO return on investment.  Vendors that will compete in this space are currently offering a range of services that can help do this, from health and wellness to member enrollment activities.  Once provider groups are operating as “mini-payers,” keeping patients healthy outside the facility walls while also keeping them happy with the level of engagement they experience with their physicians will extremely important.

Our research agenda and strategic advisory work have the ACO services space top of mind right now and our thinking is evolving constantly.  We’d love to know what you think.

Conor Green

Conor Green is a Vice President at TripleTree covering the healthcare industry, and specializing in revenue cycle management and tech-enabled business services. You can email Conor at cgreen@triple-tree.com.

Read Full Post »

Health Information Exchanges (HIEs) have been a hot topic in healthcare IT dating back to 2009.  HIEs are so often mentioned with interoperability platforms, data exchanges and integration engines that it has been difficult to sort out the actual services performed by an HIE, much less the relevant vendors and their solutions.

TripleTree defined HIEs as aggregators of electronic patient-centric, clinical information from disparate, unconnected information systems into a common repository for translation in a common format.  HIEs eliminate the need for patients having several EMRs for their health information – in some ways it becomes the virtual master patient record.

Three measurable benefits from the ability of providers to pull patient information from an HIE for a more accurate, real-time view of the patient’s health history resulting in better patient care and reduced costs include:

  • Enhanced care coordination
  • Prevention of harmful drug interactions
  • Elimination of redundant tests and procedures

The mixture of consumerism and reform in healthcare is forcing this inevitable shift toward HIEs – and since Q1’10 we’ve seen four market proof points:

  • Harris acquires Carefx: Feb 2011 – Harris acquired Carefx for $155m to expand Harris’ capabilities in government healthcare, provide an entry into the commercial healthcare market, and strengthen its position as a provider of interoperability solutions.
  • Aetna acquires Medicity: Dec 2010 – Aetna acquired Medicity for $500m as a potential counter to Ingenix’s acquisition of Axolotl and a way for Aetna to become more relevant in the provider market.
  • Ingenix acquires Axolotl: Aug 2010 –  Ingenix continued its 2010 buying spree and picked up a leader in the HIE space with Axoltol.  With Ingenix’s growing portfolio of HIT assets, we’re closely watching how they integrate Axolotl with their other clinical assets.
  • Lawson acquires Healthvision (Cloverleaf): Jan 2010 – Lawson made a move to expand their healthcare presence “beyond just an apps vendor” to become a more integrated HIT player.

Despite this consolidation, a number of standalone, pure play HIE vendors (Wellogic, Informatics Corporation of America (ICA), MobileMD, HealthUnity, Orion Health) offer relevant solutions.  Aggregating patient and clinical data into a common repository is (and will be) relatively simple.  Complexity will come from those vendors who begin to build new applications that leverage the patient-centric, rich clinical data to create “data assets” on the backs of HIEs – a key to feeding the insatiable appetite around Accountable Care Organizations (ACOs) and the marketplaces growing need to influence:

  • Care coordination
  • Decision support and evidence-based care protocols
  • Real time monitoring and event-driven triggers
  • Longitudinal patient reporting
  • Provider quality reporting and benchmarking
  • Unified patient dashboards

The winners won’t be “data plumbers” or “just integrators” but will focus on adding the applications that leverage data into new business models.  It’s still too early to tell if the consolidators can beat out the specialist pure play providers, but if you have any thoughts or would like to hear more about this sector let us know.

Thanks and have a good week.

Judd Stevens

Judd Stevens is an associate at TripleTree covering the healthcare industry, specializing in the impacts and transformation of health plans in a post-reform world.  Follow Judd on Twitter or e-mail him at jstevens@triple-tree.com.

Read Full Post »

Historically, commercial health plans have leveraged a traditional “B to B to C” model for marketing, selling and servicing health insurance products to their members. The breakdown for this distribution model is as follows – Health plans “B” create a product catalog for their broker network “B”; and brokers in turn sell to employers or groups “C”.

The pressures of a post-reform world are forcing a shift in the sales strategies of payers. Medical Loss Ratio compliance rules for example, are pinching the income statements of health plans so significantly that getting closer to the member (i.e. eliminating the broker) will be table stakes if they choose to remain competitive. Net result? The traditional model will fade and be replaced by a direct-to-consumer (“B to C”) strategy.

This threat to the broker-driven sales model is compounded by consumer “connectedness” (everywhere-WiFi + prolific mobile devices + social applications) where empowered individuals are becoming engaged relative to researching, monitoring, communicating and paying for their own health care.

Around our shop, we’re referring to this shift as ‘consumer engagement’; a concept pioneered by a few BlueCross organizations who successfully cultivated direct-to-consumer messages via TV, radio, print and online media for some time. Early on these consumer-direct campaigns were an anomaly, but we’re now seeing this approach take hold more broadly. This is more than simply educating potential members about “the right health plan” – it’s a 1:1 marketing approach with messaging the places the health plan in a new light as an entity capable of tailoring health and wellness services (bundled inside of health insurance) to individuals.

Consider what UnitedHealth Group did during this summers’ PGA Masters Tournament. The health plan behemoth aired variations of its “Heath in Numbers” television spots to showcase an optimized health experience for their members thanks to uniquely intelligent tools and services.

If Cigna, Aetna, Wellpoint and others haven’t taken note, they will – and rest assured the big ad agencies will be quick to offer them ideas honed from decades long slugfests in industries like consumer retailing and banking. These health plans are stepping onto a new competitive battlefield, and will likely find themselves trying to out-market the likes of Walmart and Target.

TripleTree is way out in front of other strategic advisors on this topic and has strong viewpoints on where the next set of industry inflection points will occur. Principally, we’re convinced that the health plans can’t go it alone successfully – they lack the internal resources and specialized skills to tackle consumerism, much less the turn-key solutions need to support the state health insurance exchanges.

We’d like to know what you think, and have a great week!

We’d also like to invite you to participate in our one question survey:
Given the momentum around consumer engagement, prioritize the five initiatives below relative to your experience as a member of a health plan.

Chris Hoffmann & Michael Boardman

Chris Hoffmann is Research Director at TripleTree covering Cloud, SaaS and enterprise applications and specializes in CRM, loyalty and collaboration solutions across numerous industries. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.

Michael Boardman is an associate at TripleTree covering the healthcare and technology industries, specializing in clinical software solutions.  Follow Michael on Twitter or e-mail him at mboardman@triple-tree.com.

Read Full Post »