There is an overwhelming confluence of interests, incen6ves, and macro-environmental forces that will disrupt the healthcare industry and drive real change.

1. www.sage-growth.com
What’s
an
IPA
To
Do?
Prepared
for
IPN
Sage
Growth
Partners
October
22,
2014

2. www.sage-growth.com
About
Us

3. www.sage-growth.com
A
Growing
Client
Roster

4. www.sage-growth.com
Hypothesis:
Health
Care
Will
be
Disrupted
There
is
an
overwhelming
confluence
of
interests,
incen6ves,
and
macro-­‐environmental
forces
that
will
disrupt
the
industry
and
drive
real
change
–
Payment
model
redesign
will
be
a
core
catalyst
for
change
4

5. www.sage-growth.com
A
Step
Further
• Even
if
no
net-­‐new,
domes6c
U.S.
HC
is
a
$1T
arbitrage
opportunity
–
and
its
largely
in
facili6es,
specialists,
transi6ons,
and
chronic
care
management
• Health
care
will
experience
its
industrial
revolu6on
– Transparency
– Standards
– Focus
on
efficiency
• In
an
industrial
model
–
community
organizers/entrepreneurs
(PCPs)
are
very
well
suited
to
assume
the
mantle
of
leadership
• The
garage
is
coming
to
health
care
• Incen6ves
are
aligned
between
payers
and
enlightened
providers
beOer
then
ever
–
economics
and
ACA
are
driving
payers
to
shiQ
risk
5

6. www.sage-growth.com
Lots
of
QuesOons
• The
role
of
physicians
–
especially
independents
• The
role
of
hospitals
and
health
systems
• The
role
of
subs6tutes
• The
pace
of
migra6on
to
VBP
• The
pace
of
provider/payer
convergence
• WHAT
IS
THE
IPA
TO
DO?
6

7. www.sage-growth.com
Focus
on
Three
Swim
Lanes
Best
Care
Dominant
Delivery
Organiza6on(s)
Dominant
Delivery
Network
Dominant
Enabling
Business
PlaZorm
Best
Health
Status
Best
Value

8. www.sage-growth.com
THE
EVIDENCE
8

9. www.sage-growth.com
Financial
realiOes
are
changing

10. www.sage-growth.com
Volume
to
value:
Reasons
for
the
shiT
10
Risk
ShiT
Payer
Value
Based
PorVolio
0
20
40
60
80
100
1990
2000
2010
2020
2030
2040
2050
2060
2070
2080
Medicare
Medicaid
Private
Health
Insurance
Driver:
Public
Reimbursement
as
%
of
Commercial
ACO
Growth
687
Medicaid
MCOs
2013
Porter
Research
Study
2013
*Including
SGR
rate
cuts
CMS
Office
of
the
Actuary
May
2012
LeaviO
Partners
2014

11. www.sage-growth.com
Hospitals
won’t
disrupt
themselves!
11

12. www.sage-growth.com
Private
Health
Insurance
Benefits
by
Spending
Category
12
18%
current
OUTPATIENT
32%
current
INPATIENT
32%
current
PHYSICIAN
4%
current
OTHER
15%
current
DRUGS
Fastest
Growth
2007
-­‐
2012
Slowest
Growth
2007-­‐2012
8.2%
Growth
10%
Growth
8%
Growth
6.1%
Growth
5.4%
Growth
Source:
Price
Waterhouse
Coopers
Medical
Cost
Trend:
Behind
the
Numbers
2013
“Other”
category
includes
services
such
as
ambulance,
home
health
and
durable
medical
equipment

13. www.sage-growth.com
The
(really)
lean
health
plan
13

14. www.sage-growth.com
Physician
Employment
Trends
14
Source:
Accenture
Physician
Alignment
Survey
2012.
hOp://www.accenture.com/SiteCollec6onDocuments/
PDF/Accenture-­‐Clinical-­‐Transforma6on-­‐New-­‐Business-­‐Models-­‐for-­‐a-­‐New-­‐Era-­‐in-­‐Healthcare.pdf

15. www.sage-growth.com
Sustainable?
• Hospitals
lose
on
average
$176,463
per
physician
on
owned
physician
prac6ces
• The
longer
a
hospital
owns
physician
groups,
the
higher
the
likelihood
it
is
losing
money
on
them.
• The
more
physicians
a
hospital
employs,
the
more
likely
they
incur
losses
• 78%
of
hospitals
are
paying
physicians
non-­‐produc6vity
incen6ves
(pa6ent
sa6sfac6on,
clinical
quality,
and
ci6zenship),
expected
to
rise
to
94%
in
3
years
15
Sources:
MGMA
2013
Cost
Survey
All
mul6-­‐specialty
groups,
hospital-­‐owned
and
Report:
Hospital-­‐owned
prac6ces
lose
up
to
$100K
per
doc
each
year
–
FiercePrac6ceManagement

16. www.sage-growth.com
New
reality
High
performing
provider
organizaOons
must
manage
risk
• Market
forces
driving
a
heightened
need
for
financial
accountability
• Insurers
seeking
to
transfer
the
financial
risk
of
clinical
service
• The
risk-­‐transference
taking
the
form
of
payment-­‐for-­‐value
arrangements
• Entrepreneurial
provider-­‐sponsored
organiza6ons
are
well
posi6oned
• Organiza6ons
may
lack
technology
and
solu6ons
infrastructure
to
transform
their
business
models

17. www.sage-growth.com
Where
are
you?
Are
you
ready?

18. www.sage-growth.com
NEW
(?)
PAYMENT
MODELS

19. www.sage-growth.com
IncenOves
Drive
(bad)
Behavior
19

20. www.sage-growth.com
Why
VBP?
• Purchasers
are
demanding
more
accountability
around
quality
and
cost
• Medicare
and
Medicaid
need
the
“stop
loss”
• Its
a
way
to
take
and
grow
share
• It
allows
a
focus
on
“industrial
improvement”
• Its
working
in
key
markets
• Its
driving
quality
outcomes
20

21. www.sage-growth.com
The
Impact
of
Truly
Independent
PCPs
21

22. www.sage-growth.com
BUILDING
CAPABILITIES
TO
ADDRESS
MARKET
NEEDS

23. www.sage-growth.com
CITI
research1
Framework
for
managing
populaOon
health
1Source:
Popula6on
Health
Management-­‐Hill’s
Handbook
to
the
Next
Decade
in
Healthcare
Technology,
14
May
2013

24. www.sage-growth.com
What’s
an
IPA
to
Do?
NOT
MUTUALLY
EXCLUSIVE
24
Dominant
Delivery
Organiza6on(s)
Dominant
Delivery
Network
Dominant
Enabling
Business
PlaZorm

25. www.sage-growth.com
If
It
Were
My
IPA,
I’d
be
thinking
about…
• PopulaOon
Health
–
let’s
define
–
needs
to
be
CORE
– AOribu6on/iden6fica6on
– Surveillance
– Risk
assessment
– Risk
stra6fica6on
–
what’s
our
triangle
look
like?
– Gap
assessment
– Coordinate/drive
interven6ons
• On-­‐ramps
for
providers
–
especially
PCPs
– Running
through
walls
to
enhance/aggregate
primary
care
– Build
a
new
economic
model
–
“the
era
of
3x”
– Employment
op6ons
– Find
the
entrepreneurs
25

26. www.sage-growth.com
If
It
Were
My
IPA,
I’d
be
thinking
about…
• Aggressively
courOng
Payers/Purchasers
(Insurers,
TPA/ASO,
Employers,
Unions,
Purchasing
Groups)
– Make
something
different
happen
– Get
out
and
talk
early
and
oQen
– Don’t
make
assump6ons
and
don’t
ignore
purchasers
• Embracing
transparency
wholeheartedly
–
Prices,
Costs,
Quality
• Don’t
forget
the
infrastructure
–
And
plan
the
Ecosystem
– IT,
Rev
Cycle,
Messaging,
CDS,
PH,
PI,
Retail,
remote
monitoring,
etc.
etc.
etc.
• Capital
Partners
–
be
creaOve
26

27. www.sage-growth.com
Contact:
Sage
Growth
Partners
3500
Boston
Street,
Suite
435
Bal3more,
Maryland
21224
410.534.1161