Increasingly, growth necessitates a system of care perspective and alignment initiatives that reach across the continuum. But, with whom do you align to achieve near-term growth? How do you quantify the alignment opportunity or risk associated with key partners in your market? How do you measure success?

Understanding your organization’s alignment opportunity and prioritizing effectively have become increasingly important in today’s constrained financial environment. Payer mix degradation, reimbursement erosion and other changes to the financial underpinnings of health care only add to the urgency of smart alignment strategies across the care continuum. Whether you are assessing an alignment opportunity, identifying and prioritizing partners, or determining how to move on from an alignment model that just isn’t working, having a systematic and data-driven approach will help to clarify and accelerate these strategic decisions.

Use data to identify and prioritize potential partners

For most organizations, identifying and prioritizing with whom to partner are of primary importance. This is evident in no service line more than orthopedics. With Sg2 projecting elective (osteoarthritis) total and partial joint replacements growth across IP and OP settings of 21 percent over the next five years and 80 percent over the next 10, organizations will continue to look to orthopedics as their growth engines. But, as markets become more consolidated and payer mixes degrade, providers must be more targeted in their partnerships in order to drive short-term revenue and long-term strategic relevance.

Once an organization determines that they need a partnership in orthopedics, how should they proceed? Which providers should they approach, primary care physicians (PCPs) or specialists? Which particular practices or practitioners? These are all questions that data and analytics can help answer. Using Sg2 Patient Flow, we analyzed our national claims data set to understand the care patterns for PCPs, orthopods and surgical facilities for the total joint replacement (TJR) pathway. (Note: While the results displayed below are for the national data set, Sg2 members with access to Patient Flow can perform a similar analysis for their markets using local data.)

When looking at the care pattern from orthopod consult to location of TJR, we found the connections to be highly consolidated, meaning that the number of facilities where an orthopedic surgeon’s patients had their surgeries was low, and the majority of each orthopedic surgeon’s patients were going to one or two facilities only. This makes sense given the focus health systems have had on creating stronger connections with specialists across their markets, either through direct employment, contracting, joint ventures or other types of partnerships.

Data drill down reveals importance of upstream providers

A more interesting result was discovered when examining the connection between PCPs and TJR location. Here, we saw 10 times as much variation compared to the orthopedic surgeons’ care patterns. So, clearly, if you are looking to influence patients’ treatment choices during their care episodes, you must look upstream of the specialists, and at the PCPs in particular. Drilling down further, which PCPs should you focus on? Again, analytics can inform your answer.

As you see in the chart below, considering two measures in turn – 1) the number of downstream procedures that began with each PCP practice (the y-axis values); and 2) the level of downstream facility consolidation (the x-axis range) – allows you to visualize which practices will provide the most bang for the proverbial buck when it comes to outreach and resources toward a potential partnership. In the graph below, the circled area, which indicates both larger patient panels and fragmented pathways, would be a prime target for partnerships.

The goal with this type of analysis is to identify those practices that:

  1. Are independent or affiliated with your organization
  2. Generate a large number of downstream procedures
  3. Have a high level of fragmentation relative to their peers

Once you have identified which practices meet these criteria you can then quantify what a reasonable recapture rate is to quantify the return on that potential partnership. Many member organizations have identified hundreds of thousands of dollars in potential margin growth through such analyses. In fact, the average range of near-term TJR revenue opportunity for the clients with whom we’ve completed this type of analysis has been between $550,000 and $750,000.

Assess your market/key service lines to identify unique opportunities

By taking a data-driven approach to identifying and prioritizing potential partners you can quickly begin to understand where the best potential partners are within a given market. The examples shown here are based on total joint replacements, but the learnings can be extended to other procedures or service lines and specialties as well.

For more details on Patient Flow, click here or contact Sg2.

Sg2, a Vizient company, is the health care industry’s premier authority on health care trends, insights and market analytics.

Published: November 30, 2017