Category: Case Studies

Growth strategy for outsourced hospitalist company

published date
December 1st, 2017 by

A leading hospitalist company was seeking additional growth and evaluating long-term strategic alternatives to maintain a differentiated offering in the marketplace.The overall hospitalist market is large and growing, due to increasing acceptance from community physicians, demand from hospitals for new programs and expansion of existing programs, and a growing realization that insourced solutions have drawbacks.

To determine our client’s current market positioning and growth opportunities, we spoke with current and past customers as well as potential customers. Through this process we gained a thorough understanding of customer needs, level of satisfaction, performance metrics, and operational considerations. This formed the basis of a market model of size and growth of the hospitalist industry. We further segmented this analysis to represent market potential by geography, size, and hospital type/ownership. In addition, we analyzed the competitive landscape and evaluated our client’s market positioning and differentiation.

We made specific recommendations in many areas across the business. Within sales and marketing, we helped the client refine and improve its value proposition to target hospitals and to incorporate our hospital segmentation database into sales planning efforts and marketing materials. In product development, we recommended that the client evolve its existing product offerings to address emerging issues (e.g., public reporting of quality and patient satisfaction, IT optimization). From a human resources perspective, we analyzed the labor supply and trends and made specific suggestions on how to bolster physician recruiting and retention. Lastly, we identified and profiled several acquisition targets.

Growth strategy, financing for medical risk management company

published date
December 1st, 2017 by

Advanced Practice Strategies (APS) is a medical risk management company, which partners with leading professional liability carriers such as the Harvard Risk Management Foundation/CRICO to develop demonstrative evidence for use at malpractice trials and to provide online continuing medical education (CME) to healthcare providers to improve patient safety and risk management.Health Business Group’s relationship with APS began in 2005. Initially we provided business development support and strategic advisory services to help the company negotiate or renegotiate agreements with content and distribution partners. As we helped the company gain traction we realized that the commercial potential of APS could be maximized by going beyond the bounds of a traditional consulting relationship.

In 2007, the Health Business Group team secured a round of growth financing for APS. Dennis Ferrill left our consulting practice to become CEO of APS, and David Williams became chairman of the board of directors while remaining at Health Business Group full time.

The company entered an era of growth and prosperity characterized by national expansion and development of strategic partnerships with leading hospitals, liability carriers and universities. In 2012 Ascension Health Ventures made a substantial investment in APS to support continued growth and product development.

Remote patient monitoring: market entry strategy

published date
December 1st, 2017 by

A leading medical technology company asked Health Business Group to evaluate whether the company should expand its presence in the market for remote patient monitoring (RPM) for chronic illness. RPM is a promising technology that has the potential to address fundamental issues in healthcare, especially the rising demand for chronic care coupled with caregiver shortages and financial constraints. However, the potential for RPM has not been realized; reimbursement is just beginning to emerge and few RPM companies have prospered.Opinion within the client’s senior management was sharply divided. Some thought the company should move boldly into the market through major acquisitions while others thought the sector should be avoided entirely.

Health Business Group and the client chartered a joint project team to conduct research and make recommendations. We researched the strength and nature of customer demand, which we compiled through interviews and secondary sources. We identified and profiled a set of vendors and competitors, and conducted in-person evaluation sessions with the joint team.

Relying on our experience in disease management we developed a quantitative economic value creation model to demonstrate the potential return on investment from RPM for a variety of chronic conditions, including diabetes and heart failure. Finally, we established a set of strategic options and evaluated them according to objective criteria.

In the end the joint team adopted a robust set of strategic recommendations that unified top management’s thinking and set the company on a defensible strategic course.

Private equity investment in health IT company

published date
December 1st, 2017 by

Passage of the Affordable Care Act (ACA) has created attractive opportunities for private equity firms to invest in companies that serve newly insured segments of the population and contain costs.But investing in the sector requires insight into the details of how health reform is rolling out and how different players in the market are likely to react to new incentives,rules and opportunities.

A middle market private equity firm asked Health Business Group for guidance on an investment in a health IT company that focused primarily on the Medicaid market. Key questions included: How would Medicaid expansion impact different customer segments and different states? To what extent would Medicaid shift new entrants into managed care? Would Medicaid managed care companies be interested in working with the company? Could the company’s offerings be expanded to the Medicare and commercial markets?

Health Business Group leveraged its deep understanding of healthcare reform to refine and sharpen they key questions and to develop hypotheses for validation. Our team then conducted interviews with the target company’s existing customers, prospective customers in new market segments, industry experts and competitors. To increase our sample size we also developed and conducted an electronic survey of prospective customers across several segments.

We worked seamlessly as part of the private equity firm’s deal team and used our diligence findings to provide coaching and business development leads to the company to add additional value once the deal was consummated.

GOP ignores the Cadillac already in the garage

published date
June 5th, 2017 by
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Cadillac taxi?

The Wall Street Journal is a serious newspaper, so I had to laugh when I read GOP Senators weigh taxing employer health-plans. Apparently Senators are thinking about including a new tax in their Obamacare repeal bill in order to raise revenue, improve equity, and reduce the distorted incentives that divert taxable wages into non-taxable healthcare expenses.

We learn from the article that although it’s a solid policy idea and is being considered by many Republicans, “it could be politically risky, since it could expand the impact of GOP health proposals from Medicaid recipients and those who buy insurance on their own to the roughly 177 million people who get coverage through their employers.”

Republicans accused Obamacare opponents of not having read the Affordable Care Act before approving it in 2010. Seven years later it appears Republicans themselves haven’t read the law that they are now trying to overturn. If they did they would discover that Obamacare already includes this provision, an excise tax on high cost employer plans, nicknamed the Cadillac tax.

It’s far from perfect, but it’s not so bad either. It places a steep tax on corporate health spending above a certain high level, thus limiting the impact to the most serious cases, discouraging healthcare inflation, and phasing the tax in gradually.

So rather than wasting time discussing a new approach where consensus will be hard to forge, all the GOP has to do is leave the Cadillac tax in place. While they’re at it they might consider leaving the rest of the Obamacare in place, too, and working to improve the few areas that need a tune-up.

But I read the whole article in the print edition without finding any mention of the Cadillac tax. Someone must have pointed that out to the editor, because the online version tacked on two sentences at the end about it.

As I argued back in February (Can Congress agree on the Cadillac tax?) limiting the tax deductibility of employer sponsored health insurance is a good idea, but is opposed by a huge array of forces on the left and the right. I advocated then and am suggesting now, to leave the Cadillac tax in place.

By healthcare business consultant David E. Williams, president of Health Business Group.