Category: Hospitals

Massachusetts healthcare turmoil: I’m quoted in the Boston Globe, Herald and CEO Magazine

published date
June 13th, 2018 by

I’m always happy to speak with the press to provide my take on healthcare business and policy. In the last few days I’ve been quoted in a few outlets:

Today’s Boston Globe: In a sudden departure, Harvard Pilgrim CEO resigns amid questions about his behavior

Harvard Pilgrim and Partners each said Tuesday that Schultz’s resignation does not affect their discussions about a possible merger.

But David E. Williams, a Boston health care consultant, predicted the leadership change at Harvard Pilgrim would slow any other major moves by the insurer.

“I think it reduces the chance that a deal will happen, especially in the near term,” Williams said. “The Harvard Pilgrim board can’t deal with two major things at once. Partners will want to wait and see if something else shakes out at Harvard Pilgrim.”

Today’s Boston Herald: Harvard Pilgrim CEO resigns over ‘behavior’

Neither Schultz nor a company spokeswoman would comment on the nature of his behavior, or whether he is receiving any severance payments.

“I think the board is likely to be sensitive to that topic here,” said David Williams, president of Health Business Group. “Any expense is going to be borne in some ways by the customer.”

Yesterday’s Boston Globe: Beth Israel and Lahey say they want to learn from missteps in earlier merger

Beth Israel Deaconess and Lahey do seem to have much in common. Both have flagship medical centers and a network of community hospitals. Both are considered high-quality, and they have lower costs compared with the region’s largest hospital network, Partners HealthCare. On their own, both have struggled to compete with Partners, which includes the renowned Massachusetts General and Brigham and Women’s hospitals.

“There’s a decent amount of compatibility and similarity,” said David E. Williams, president of Health Business Group, a Boston consulting firm. “BI and Lahey spent a lot of time getting to know one another and making sure that this is a good fit.”

The current edition of Chief Executive: Athenahealth CEO Jonathan Bush resigns: Avoiding a similar fate

In both cases, Sonnenfeld says the boards didn’t have the fortitude to stand up to the attacks. David E. Williams, president, Health Business Group in Boston, similarly seen this scenario play out before where a founding CEO is ousted by investors.

“It actually usually happens at an earlier stage than what you’re seeing here. What’s so noticeable here is that [the CEO] has been involved with the company for a long time and is a large publicly-traded company,” Williams says.


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

 

 

Partners/Harvard Pilgrim merger madness: I’m quoted in the Boston Globe

published date
May 9th, 2018 by
Beast of the East?

I just finished my post (Partners and Harvard Pilgrim aren’t really going to merge are they?) when I got a call from the Boston Globe asking about the same topic.

I’m quoted on the front page today (Experts puzzle over Partners-Harvard Pilgrim merger talks) and am happy to see I’m not the only one that is struggling to see the logic behind such a combination.

Here’s what I said:

“My guess is that regulators would not like this,” said David E. Williams, president of the Boston consulting firm Health Business Group. “There’s no compelling logic for a merger here. There would be a lot of resistance to it.”

Williams said he doesn’t see a good business reason for a merger since Partners and Harvard Pilgrim, one of the largest health insurers in Massachusetts, could choose to work together more closely while remaining independent.

I’m pretty sure the idea of a merger won’t get very far. Stay tuned.


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

 

Partners and Harvard Pilgrim aren’t really going to merge, are they?

published date
May 7th, 2018 by

Friday’s news was full of stories about merger discussions between Partners HealthCare and Harvard Pilgrim Health Care. No one denied the reports, so we can assume there’s some truth to the rumors. But why would these organizations contemplate a merger and how likely is it to happen?

From Partners’ perspective:

  • After growing for decades by taking over other providers, Partners has run out of options for major acquisitions. The state blocked Partners’ attempt to buy South Shore Hospital, for example. Meanwhile, Partners’ biggest rival, Beth Israel is becoming more formidable as it combines with Lahey. In some ways a Partners/Harvard Pilgrim merger would be analogous to the proposed Aetna/CVS combination, which was pursued only after Aetna’s planned purchase of Humana was rejected on antitrust grounds.
  • After buying Neighborhood Health, Partners is comfortable with the idea of owning an insurer. But they want one that’s bigger and focused on the commercial market rather than Medicaid.
  • The shift to value based care means providers need more of the capabilities typically found within health plans. This becomes a buy v. build decision.

From Harvard Pilgrim’s perspective:

  • Even though it’s not the number one player in the market, it too may be too big to get away with acquiring a significant competitor, e.g., Tufts Health Plan.
  • The Partners account itself actually has about 100,000 members. Shifting that business away from Blue Cross could be significant even on its own. (Although it kind of reminds me of the Cheech and Chong sketch where Chong proclaims himself a “good customer” –of himself).
  • Possibly, Harvard Pilgrim could gain an exclusive relationship with Partners, where the only way to get care at Partners is by purchasing a Harvard Pilgrim plan. That doesn’t seem likely, but who knows?

Overall

It’s not unusual for health plans and providers to consider tying up. Remember, Harvard Pilgrim’s predecessor, Harvard Community Health Care was a staff model HMO with its own physicians and care facilities. More recently, you see combined payers and providers (“payviders”) emerging in the Medicare Advantage space. There is a certain appeal to combining health insurance and delivery in one entity–Kaiser is Exhibit A– but ultimately it’s not such a superior model.

I don’t think a merger of Harvard Pilgrim and Partners has a compelling rationale and I don’t see it happening. More likely is some kind of limited alliance or joint venture.

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

 

Steward moves to Dallas. I’m quoted in the Boston Globe

published date
February 26th, 2018 by
What goes around comes around

Steward Healthcare, one of Massachusetts’ largest employers, is moving its headquarters to Dallas. I’m quoted on the subject in the Boston Globe (Steward Health Care to move top executives to Dallas)

“Steward was always a fish out of water in the Massachusetts health care scene as a for-profit, private-equity owned health care company,” said David E. Williams, president of the Boston consulting firm Health Business Group.

Williams said a corporate relocation to Dallas makes sense for the company: “It’s a less expensive place to do business, it’s more central, and it’s close to some new hospitals they’ve recently purchased and need to focus on.”

This move was no surprise, and has been rumored since November. The company will take up residence in a brand new office tower in Dallas.

A few thoughts:

  • This is unlikely to be negative for Massachusetts. Only a small number of positions are likely to be moved, and many of the current job holders will be offered relocation packages. Anyone left behind is likely in a good position to find another attractive position
  • The vast majority of Steward employees are in the local hospital communities. They will be staying along with their taxes and spending
  • Steward hospitals will continue to pay property and other taxes as a result of their for-profit status. (They won’t be reverting to their non-profit, non tax-paying days from before the purchase)

The main reasons for the move seem to be to get closer to Steward’s center of gravity and to find a lower cost location, consistent with Steward’s overall low-cost philosophy. But there are a couple of warning signs for Massachusetts here:

  • Steward’s decision makers are presumably aware of the proposed ballot initiative to impose a surtax on high income earners. Their move demonstrates that companies have options to help their executives avoid this tax
  • No doubt Steward has been irritated by pressure from the Massachusetts government to surrender financial data that Steward felt should be private. Moving to Dallas is likely to relieve Steward of at least some of that pressure

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

Amazon: Force the healthcare system to become patient-centric

published date
February 6th, 2018 by

The announcement that Amazon will work with JP Morgan Chase and Berkshire Hathaway to create a new healthcare organization for employees has health plans and providers running scared. Initial press coverage has focused on the impact of this group on the market value of CVS, United Healthcare and the like –but how many people really care about that?

CareCentrix CEO John Driscoll has the right idea when he suggests that Amazon should compel provider organizations to put the patient first –for real, not just rhetorically. His three specific suggestions are good ones: mandate self-service scheduling, introduce  a universal patient portal, and improve the quality of provider reviews. As simple and straightforward as those sound, they would require Amazon and its partners to overcome serious resistance. It will be fascinating to watch what happens.

Assuming Amazon can make those basic but challenging changes come to pass, I have two additional, ambitious suggestions to help patients:

  1. Ensure that patients receive clear, consistent, actionable follow-up information when they leave a doctor’s appointment or are discharged from the hospital.
  2. Use the full set of information available about a patient to anticipate their needs and help them navigate the system.

The first idea is a simple one, which should be happening anyway, and occasionally does. The challenge is to get the provider system to care enough about what happens upon discharge and provide the tools, training, information and support to enable more seamless and empowering transitions. I was shocked at how poor the discharge instructions were after my release from the emergency department a few months ago, after I was struck by a car. I received basically nothing and had to count on family and clients in the medical system to help me. I know I’m not the only one who’s had this experience.

The second idea is broader and vaguer, but starts to draw on the expertise of Amazon’s partners who are in the financial services and insurance industries and have a lot of information about their customers. The consortium could help patients chart their financial path through the healthcare system, helping them identify what insurance to select, how much to save in their HSA and FSA, and where and when to get their care. It could be a virtual concierge for patients, relying big data and machine learning to provide insights and continuous improvement.

If these suggestions were implemented they would have a high impact, even though they would not completely transform the system. It seems like about the right level for this group to shoot for. If they try to be bolder they will likely fail.

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