INTRODUCTION TO ECOSPHERE
As the changing healthcare landscape continues to reshape the regional ecosystem, The Kinetix Group (TKG) has developed a tool to help guide more strategic and tactical decision making. Specifically, our new tool—named EcoSphere—analyzes the interplay between hospitals, health-systems, payers, and alternative payment models at a metropolitan statistical area (MSA) level. This tool, through the analysis of multiple stakeholders on one platform, enables a more comprehensive understanding of which stakeholders are most influential and who owns patient risk. EcoSphere enables life science teams to develop targeted and customized strategies at a regional/local level to drive market share, inform product commercialization, or catalyze effective field team planning.
TKG has developed some specific features to EcoSphere that enables a quantitative stakeholder analysis:
- Our analysis of payers includes commercial health plans, pharmacy benefit managers (PBMs), Medicare Advantage plans, and Medicaid plans to ensure that we accurately depict who is managing patient risk
- TKG has developed an Alternative Payment Model (APM) Index to quantify APM relationships at a regional level, focusing on Accountable Care Organization (ACO) and Bundled Payment Care initiative (BPCI) activity
- TKG has stratified both health systems and hospitals through patient revenue metrics
TKG, through our understanding of the healthcare landscape, can utilize EcoSphere to help identify the optimal path of customer engagement at the MSA level. Use cases of this tool include:
- Through identification of APMs and interdependencies, TKG will be able to identify the owners of patient risk and the true decision makers
- Developing an MSA-level commercial strategy and tactical plan to maximize existing resource allocation and tool development
- Applying a more meaningful taxonomy to customer segmentation, utilizing the practical data from EcoSphere
- Identifying MSAs and customers that are appropriate targets for innovative contracting opportunities
To illustrate the utility of EcoSphere, TKG has conducted a cursory analysis of the Dallas/Fort Worth/Arlington area.
OVERVIEW OF THE DALLAS/FORT WORTH/ARLINGTON MARKET
Like many MSAs across the United States, the Dallas/Fort Worth/Arlington market is dynamic and evolving. First, within the payer stakeholder, commercial health plans, PBMs, Medicare Advantage plans, and Medicaid plans are all represented in the top 20 payers.
Similarly, both health systems and hospital networks dominate the composition of the top healthcare provider organizations.
Finally, TKG developed an APM Index that compares MSA-level APM activity to a national average. In Dallas/Fort Worth/Arlington, EcoSphere APM Index is 11% higher than the national average.
STAKEHOLDER ANALYSIS
The overall theme, like many regional ecosystems in our analysis, is consolidation. Dallas is characterized by the dominance of a few major stakeholders representing the payers, healthcare provider organizations.
Continued Health Plan Dominance
We observe some notable trends in our analysis of key stakeholders in the DFW MSA. Through our analysis of the APM landscape, the health plan appears to maintain its traditional dominance. Sixty percent of the ACOs are commercially driven (as opposed to Medicare Shared Savings Programs [MSSPs], which are primarily driven by health systems) and are significantly represented by 3 health plans: Aetna, United, and Blue Cross Blue Shield. In the EcoSphere visual below, we show a sample of the connectivity of the 3 largest payers to alternative payment activity.
Among the large health plans, it is important to separate the fully insured lives (ie, risk managed by plan) versus the self-insured lives. This breakdown clearly shows that Blue Cross Blue Shield of Texas is the dominant health plan of fully insured lives.
Healthcare Provider Organization Consolidation and Baylor Scott & White Dominance
While Tenet Healthcare is the largest healthcare provider organization, an analysis of APM activity reveals a more dominant player. Baylor Scott & White has 34 different hospitals affiliated with its MSSP—the Baylor Scott & White Quality Alliance ACO—which dwarfs any other healthcare provider organization in this market.
Clearly, with so many facilities associated with its MSSP, Baylor Scott & White has the largest footprint managing patient risk in the DFW MSA.
KEY EMERGING STAKEHOLDERS AND INFLUENCERS
Cigna
One of the notable dynamics among health plans is Cigna. With membership trailing United, Aetna, and Blue Cross Blue Shield, it would seem that Cigna is far from a major player in the DFW MSA. Additionally, Cigna only has 134,000 fully insured lives (as opposed to its 745,000 self-insured lives), which is far less than United and Blue Cross Blue Shield.
However, upon analyzing the APM landscape, a much different dynamic is evident. Of the 34 commercial ACOs in the market, 16 are linked with Cigna. Because Cigna is a significant actor in the ACO space, it may be an underappreciated influencer in the regional ecosystem.
We will discuss later in this analysis the practical implications of this dynamic.
Catalyst Health Network
Catalyst Health Network is a clinically integrated network of independent primary care physicians (PCPs). With more than 500 PCPs in a network that has saved more than $20 million in its first performance year, Catalyst is a health disruptor that is thriving in a value-based landscape.
IMPLICATIONS
Based on the findings provided by EcoSphere, TKG has provided an overview of practical implications for optimal engagement in the Dallas/Fort Worth/Arlington MSA.
Understand the influence of the different payment and delivery models
The adoption and prevalence of various alternative delivery and payment models is fluid and multi-faceted. For optimal customer engagement, we recommend a traditional, evolving, or innovative approach to customer engagement.
A traditional customer engagement approach is most appropriate for healthcare provider organizations predominantly in a fee-for-service (FFS) payment and delivery model. These organizations will benefit with an approach that optimizes performance in a FFS model, with general awareness of the evolving value-based landscape.
An evolving approach is appropriate for most systems that currently are some type of hybrid FFS/value-based model of care delivery. Best practices in practice transformation—with complementary supporting tools and resources—will resonate with this customer archetype.
An innovative approach is needed for organizations that are significantly involved in value-based payment and delivery models, likely with both upside and downside risk. These organizations will welcome risk-based collaborations and novel approaches to patient engagement.
Here is an example of how an EcoSphere analysis of APM activity can help guide the optimal customer-centric approach:
Approach Baylor Scott & White and CIGNA in a Value-Based Context
Baylor Scott & White has an ACO with 34 different hospitals, and Cigna has 16 different ACOs. With this depth and breadth of engagement, a value-based customer engagement is a must.
Continue to Monitor a Fluid Value-Based Landscape
As new APMs continue to emerge (recently announced Centers for Medicare and Medicaid Services Primary Cares, as an example), it is essential to constantly assess the dynamics of alternative payment and alternative delivery at the local ecosystem level.
To learn more about EcoSphere and other TKG offerings, email info@thekinetixgroup.com.