THE WORLDWIDE WEARABLES MARKET GREW 223% IN Q2 OF 2015… Even though Apple just entered the wearables space last quarter, the Apple Watch is already second in terms of worldwide market share, according to new data from IDC. Fitbit remained first, with 24% of worldwide wearable device market share in Q2, followed closely by Apple at 20%. According to IDC, the challenge for vendors of “basic” wearables (i.e. those that do not run third party apps) will be “to compete with the additional features offered by smart wearables while still turning a profit in the price sensitive basic wearables market.”
Impact Advisors’ Thoughts: The growth in the wearables market has been truly impressive over the last few years. We continue to think this trend can be an important springboard to engaging patients more meaningfully in their care – particularly for innovative provider organizations that find creative ways to tap into the enthusiasm many consumers have right now for these devices.
EVER WONDER HOW BONUS PAYMENTS ARE DISTRIBUTED WITHIN AN ACO?… Modern Healthcare reports that on average, when a Medicare ACO qualifies for a bonus, primary care physicians receive the highest percentage of the payment. For context, ACOs in Medicare’s Shared Savings Program that successfully contain costs for a patient population while also meeting quality standards are eligible for a bonus (also referred to as “shared savings” payments). As Modern Healthcare points out, each ACO decides for itself how to distribute the bonus payments among participating PCPs, specialists, and hospitals. However, the article also notes that “those individual management decisions are a matter of much scrutiny and debate in the industry and among policymakers” right now. Overall, only 1 in 4 Medicare ACOs qualified for bonus payments last year.
Impact Advisors’ Thoughts: We think the article – which is interesting and highly recommended reading – also underscores another important point: how do we quantify “levels” of accountability in a model that involves many different types of providers? Right now, it is largely just bonus payments that are being distributed to participants within an ACO, but soon enough ACOs will also have to take on financial risk for their performance. Is there any correlation between how an ACO distributes bonus payments and the level of risk each participant in that ACO can be expected to take on? Should there be? Obviously these are just rhetorical questions, but we wouldn’t be surprised if these are the types of issues CMS is at least thinking about – especially given the agency’s publicly stated goal of increasing the amount of financial risk ACOs assume for their performance.