Analysis: How traditional healthcare providers can compete with innovators and progressive incumbents

• Premier has launched a new company that looks to pair health systems and employers to reduce clinical variation and unnecessary care, according to a Modern Healthcare article.
• Thirty-five health systems, representing more than 440 hospitals, have signed letters of intent to participate in the new venture, according to Modern Healthcare.
• HFMA’s Chad Mulvany says being a high-quality, cost-efficient provider is the first step traditional healthcare providers can take to reduce the risk of having new entrants or progressive incumbents from disrupting their business.

Modern Healthcare is reporting, “Premier has launched a new company, Contigo Health, which looks to pair health systems and employers to reduce clinical variation and unnecessary care.”

“Contigo Health aims to leverage Premier’s vast inpatient dataset to build on employers’ existing health benefits packages. It will offer electronic medical record-integrated software to guide care appropriately as well as tap underutilized wellness programs for employees, executives said,” the Modern Healthcare article reported.

“Thirty-five health systems, representing more than 440 hospitals, have signed letters of intent to participate. Contigo is also working with several large, self-insured national employers — one of which has more than 200,000 employees—which it expects to announce in the coming months.”

Takeaway

As I’ve shared in a number of places, including my Oct. 10 blog, my Nov. 12 blog and a podcast on disruptive partnerships and innovation, one of the challenges facing traditional health systems is new entrants and progressive incumbents developing platforms that negate investments in primary care by providing more convenient access, which can disrupt referral patterns.

Being a high-quality, cost-efficient provider is the first step in reducing the risk of having this happen. While that’s necessary, it’s not enough. Hospitals and health systems will also need to collaborate/align themselves with platforms that will reward them for the value they create for purchasers by steering referrals to them.

Beyond aligning with Walmart (as both a purchaser of coverage for its employees and as a potential provider of primary care services) or CVS/Aetna directly, Contigo Health is one example of a platform that will allow organizations to partner with employers on value based arrangements.