The Strategy Catalyst Dispatch
The Strategy Catalyst Dispatch brings healthcare strategy professionals into the room with leading health system executives to explore how innovation, clinical leadership, and enterprise strategy intersect. Designed for strategy executives, physician leaders, and healthcare innovators, the podcast offers actionable takeaways to help organizations drive both clinical and financial impact.
The Strategy Catalyst Dispatch
The Strategist in Brief: October 24, 2024
This episode features an interview with Cone Health CSO Chris Cornue about the system's decision to join Risant Health, driven by their long-term shift into value-based care and their pluralistic physician model that gained buy-in from both employed and affiliated providers across 14 specialties. The episode also covers resumed merger talks between Humana and Cigna that could create the second-largest payer, declining CMS Medicare Advantage star ratings affecting 62% of beneficiaries, and retail pharmacy struggles including CVS CEO Karen Lynch stepping down and Walgreens closing 1,200 stores while facing massive healthcare services losses.
This is the audio version of the strategist and brief. For this week's key market dive, we held an interview. With cone health CSO, Chris Carnew to discuss the system's decision to join Ryzen. And health. Cone health long-term strategy involves a significant shift. Shift into value based care and they believe joining Ryzen will accelerate that process. Yes. Ryzen is looking for health system partners with demonstrated expertise. With value based care and a strong financial position for future growth. Cone. strategy and market was attractive. A major point of differentiate. for cone is its pluralistic physician model and strong connections. With both employed and affiliated providers. To generate buy-in. This system brought together employed and affiliated physicians from 14 specialties. Primary care. OB GYN, GI oncology. Cardiovascular hospitalist, pulmonary to. Evaluate the Ryzen model from a clinical perspective. They ended up becoming. Coming major ambassadors to support the deal amongst the medical groups. Cone health has hoping to shape horizons model and governance by becoming one of the earliest systems that joined. The organization. It will join councils to co-create Ryzen and its. Model. Cornu calls the deal, the most unique strategic partnership that I've ever seen in. And now our first market scan. Humana and Cigna have resumed merger talks and some analysts now think the deal. Is a matter of, if not, when. The deal was stalled due to the math. Before, but Humana's declining value could make it possible. The. Combined entity would be the second largest payer by overall market share. Hello. Health systems might face tougher decisions around contracting, especially dropping. Medicare advantage if Humana's ma contracts are attached to Cigna's commercial. Marshall lives. With that said Humana has been through this dance several. Several times. So there's healthy skepticism about the chances of success. And regulatory approval. Okay, moving onto our next market scan. CMS released its M a quality star ratings for 2025. Overall. Overall the sheriff beneficiaries enrolled in plans. Earning four plus stars fell. Well from 74% in 2024 to 62% in 2025. With particularly steep declines for United health group and Humana. Only seven plans are now rated five stars. The. The shifting ratings could influence enrollment choices at a critical period as the peak of. The baby boomer generation enters Medicare. Health systems. With their own provider, sponsored plans have an opportunity to differentiate themselves with higher. Quality ratings while all systems may see opportunities to get quality bonuses. Onuses or shared savings by including stars improvement efforts in contracts. It's. Following the success of similar suits last year. United. At health group and Humana are suing CMS over the declines, which could eventually scramble rating. Our final market scan looks at recent negative headlines. Lines in the world of retail pharmacy. CVS announced that CEO. Karen Lynch has stepped down from her position and is being replaced by David joiner. Owner who currently leads Caremark. The new CEO is a sign that the PBM. BM and high margin business units are now the priority at CVS. Lynch. I had a vision for a broader flywheel, but was ousted for an inability to execute. Cute on it. The company is also cutting some infusion services handled by its. It's corium subsidiary. Hi, labor costs, low reimbursement. Rates and competition from PE backed freestanding infusion centers. It makes it exceedingly difficult for a non-hospital infusion business, like Corum to succeed. Instead Corum we'll focus on higher margin specialty pharmacy. The infusions. Health systems have an opportunity to capture more of. The growing alternative and home infusion segment and themselves. Walgreens announced that their healthcare services arm saw losses in 2020. For eight times larger than the previous year. It plans to close 1200. Stores over the next three years, including 500 within the next year. The company's stock price rose on the news, a sign that investors think the retailer. Retailers cost cutting efforts are credible. Village MD is. Now being viewed as a non-strategic asset, that Walgreens needs to monetize as the company. That concludes our summary of this week. Strategist. Edition. Be sure to check out the full version on the web@hmacademy.com.