Impact Insights

Week in Review 2/13/15

New data from Kaufman Hall finds that hospital M&A activity continued at a strong pace in 2014, with 95 hospital transactions announced. The number is down slightly from the 98 transactions announced in 2013, but is still 40% higher than the 66 transactions reported in 2010. According to Kaufman Hall, “hospital transactions in 2014 represent an acceleration in larger, more flexible, and less traditional combinations, as organizations seek creative approaches to attaining the scale and scope needed to manage health under value-based payment.”


Hospital Transactions: 2010-2014

                       Hospital Transactions_021315
Source: Kaufman, Hall & Associates, LLC, February 9, 2015

Impact Advisors’ Thoughts: As hospital M&A deals become more creative and less traditional, IT challenges related to system integration could very well increase as well. Definitely an interesting area to watch over the next year.


A large coalition of providers – led by the National Association of ACOs – believe more improvements are needed to the Medicare Shared Savings Program (a.k.a. Medicare’s ACO program). In a letter to CMS, the groups said the program still “places too much risk and burden on providers with too little opportunity for reward in the form of shared savings.” CMS published a proposed rule with changes to the program in December 2014, with one of the goals being to encourage greater ACO participation in risk-based models. Currently, over 98% of participants in the Medicare Shared Savings Program (more than 330 ACOs in total) have selected the “one-sided” model, which allows ACOs to share in the savings they generate without having to be responsible for any losses. Only five ACOs in the Shared Savings Program (!) selected the “two-sided” model though, which offers higher shared savings payments but requires the ACO to take on a certain amount of financial risk and “share” in losses.

Impact Advisors’ Thoughts: We certainly agree that transition to a risk-based Medicare ACO model cannot happen overnight. However, it is important to remember that is where Medicare’s Shared Savings Program has always been heading; the “one-sided” ACO option was really only intended as a stepping stone. With the recent news that HHS plans to greatly expand participation in alternative payment models like ACOs, one of the biggest things to watch will be what role risk plays in new (or modified) initiatives CMS will presumably be rolling out. Will the focus be on getting widespread participation primarily through “one-sided” arrangements and then slowly increasing the level of financial risk participants must take on over time?


A new report from Chilmark Research finds that “patient engagement is taking a backseat to other enterprise priorities” such as analytics and population health. According to the study (per Healthcare IT News), the healthcare industry – and vendors of patient engagement tools in use – are “still struggling to catch up with basic consumer expectations set by banking, airline and other major consumer industries.” The 14 vendors profiled in the report are: Aetna / iTriage, Allscripts, Axial Exchange, Cerner, Dossia, Emmi Solutions, Get Real Health, GetWellNetwork, Influence Health (MedSeek), McKesson / RelayHealth, MedFusion, Microsoft HealthVault, NoMoreClipboard, and WebMD.

Impact Advisors’ Thoughts: We don’t have access to the full report (sorry), but we have always found content from Chilmark to be excellent. The findings of the study – at least as reported in the press – also mirrors what we have seen firsthand in terms of IT priorities and relative immaturity of patient engagement tools compared to other industries.


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