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: November 21, 2024
This episode covers the CSO Forum in Phoenix, where health system executives discussed revenue diversification and capital constraints, with key insights on prioritizing strategic initiatives and segmented care models. The episode also covers Forward's sudden shutdown despite raising $100 million due to its unsustainable $149 monthly subscription model, and the DOJ's lawsuit blocking UnitedHealth Group's $3.3 billion Amedisys acquisition over antitrust concerns.
This is the audio version of the Strategist in Brief for November 21st, 2024. This edition begins with a recap of our favorite insights from the CSO Forum held in Phoenix, Arizona in late September, where we had the pleasure of seeing many of you in person. In total, 33 executives representing 29 different health systems joined us for the event. Key topics of discussion included continued diversification away from inpatient revenue, rising pharmaceutical costs, blending physical digital care, And capital and financial constraints on large scale transformation. We homed in on three insights. First, multiple venues and timelines for strategic planning, as well as the number of stakeholders involved, is forcing CSOs to be pickier about selecting short and long term priorities. Second, access challenges will not be solved just by making it easier to get into the system, but rather through new models focused on segmentations by patient, market, and payer type. Multiple systems discussed innovative new care models that cater to different segments of the market, such as Norton Healthcare's drive thru clinic for low acuity care. Third, new corporate structures are helping maximize the effectiveness of external partnerships. For example, Emory Healthcare's decision to spin off a life sciences consulting business has helped it be more responsive to partners by bypassing the academic medical system's internal bureaucracy. Moving on to other news you should know, concierge primary care disruptor Forward suddenly announced that it is shutting down operations one year after it raised 100 million dollars to expand its CarePod self service kiosk model. Forward tried to copy one medicals model, growing mostly through the direct to consumer channel in large cities, but at a higher price point aimed at a more niche consumer segment, the wealthy, worried well. Forward's monthly subscription, priced at a hundred forty nine dollars, Was approximately 10 times as expensive as One Medical's membership fee, which likely left it too small of a total addressable market. Further, the glut of data provided to patients early on likely discouraged an ongoing subscription. For health systems that might want to go after a similar segment of the market, likely to build on executive or concierge offerings, Forward's failure indicates the acceptable price point for consumers is perhaps far lower than expected. Such models would have to be very well connected to downstream specialty services to be profitable. With that said, it's possible that Forward's attempt at AI enhanced primary care was simply too early to market. We can imagine an AI augmented concierge healthcare service with better execution succeeded in the future. Moving on to our final news item, the Justice Department is suing to block UnitedHealth Group's 3. 3 billion acquisition of home health provider Emeticis. If the merger goes through, UnitedHealth Group would control 10 percent of the overall home health and hospice market, and over 30 percent of the market in eight states, according to the DOJ's complaint. UnitedHealthGroup and Emeticis tried to ease anitrust concerns by offering to divest certain assets to ViTal Caring Group, but the complaint alleges that this was not sufficient. Many health systems seeking home health capacity to drive down average length of stay, would prefer the acquisition to be blocked and to be able to work with an independent Emeticis instead of a subsidiary of UnitedHealthGroup. That concludes this week's Strategist in Brief. Be sure to check out the full version on the web at hmacademy. com. Thanks for listening.