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: April 3, 2025
This episode covers the merger between hospital-at-home operators Dispatch Health and Medically Home, which combines health system and payer-oriented products but raises questions about the combined company's loyalties and financial sustainability. The episode also discusses Stanford Health's partnership with midwife provider ULA to expand into Connecticut, private equity consolidation in intellectual and developmental disability services, and OptumRx's shift to cost-based pharmacy reimbursement as a potential PR move amid regulatory pressure.
This is the strategist in brief for April 3rd, 2025. Our first market scan covers the news that hospital at home and home-based care operators. Dispatch, health and medically home have agreed to merge with the deal. Expected to close by midyear. The merger would combine medically homes health system oriented product with dispatches payer oriented product. Stronger ties to payers could be a boon for health system partners, but it also raises questions about where the combined company's loyalties will lie. Their combined scale could make their models more appealing to payers and make it easier to reach a financial breakeven. Medically homes model faces greater risks from uncertainty over the Federal Hospital at home waiver. Considering dispatches greater size and valuation, the deal could be interpreted as an acquisition rather than a true merger. In other news, Stanford Health is partnering with midwife provider ULA to open at least two clinics in Connecticut. The locations will offer full service, gynecology and pregnancy care, including access to care navigators and virtual support. The new clinics will offer Stanford Health an opportunity to acquire patients and grow market share in a region with a slightly declining birth rate. Midwifery is a growing segment of the healthcare industry, but providers face challenges with reimbursement and regulatory differences at the state level. In a third piece of news, private equity owned firms are consolidating providers of services for patients with intellectual and developmental disabilities. According to a report by a watchdog advocacy group, the IDD market is growing and highly fragmented, making it right for PE led disruption. The report raises questions about these providers, quality and regulatory compliance, which in turn raises questions about their ability to receive discharged patients. However, it's unclear if PE and providers are truly worse than the non-profit providers they're displacing. For our final piece of news, OptumRx is shifting to a cost-based payment model for pharmacy reimbursement and eliminating reauthorization requirements for dozens of drugs. These changes strike us as PR moves intended to head off political and market shifts that threaten their dominant position. The switch to cost-based reimbursement introduces greater transparency for health system owned pharmacy, but it also raises questions around financial sustainability, three 40 B implications and administrative complexity. That concludes this week's edition. Be sure to check out the full version on the web@hmacademy.com. Thanks for listening.