Former director at Privia Health Group Inc
- Value-based care and provider services industry trends and developments
- Capitation agreements and revenue model analysis, emphasising differences between “no upfront costs” and shared savings models
- Competitive landscape and key differentiations among Privia Health (NASDAQ: PRVA), Aledade, Agilon (NYSE: AGL) and others
- Potential M&A activities within the primary care sector, including likely buyers
- H2 2022 outlook and growth potential, including business risks, strategic assessments and threat of end-to-end offerings
What major trends and developments have you been following in the provider value-based services space over the past 6-9 months or so?
Could you discuss the business models of Privia, Aledade and Agilon respectively, including the value they’re bringing to providers in some of the risk capitation agreements, as well as the key areas of differentiation in revenue models? I understand some of them employ either a percentage of shared savings, “no upfront costs” or somewhere in between.
How penetrated is the overall US provider market in terms of utilisation of the types of platforms we’re discussing? How do you see this trending over the next few years as adoption of risk-shared and full risk capitation models develops?
How much of a risk are large health systems and payers buying up independent provider groups? You mentioned Optum, which is already buying provider groups and facilities. To what extent might this be narrowing the accessible pool of provider partners for the pure play value-based care provider services tech platforms?
According to CMS [Centers for Medicare and Medicaid Services] data, some provider services and value-based care platforms recorded annual shared savings losses after having generated positive shared savings in prior years. Why might a tech platform report savings gains followed by savings losses, and how likely is that to continue?
How are some of the organisations thinking about cost-quality trade-offs? At a certain point, it’s almost impossible to reduce costs further without sacrificing quality. Are there drawbacks to the model as it becomes most optimised?
How are you viewing the opportunity in the commercially insured population? Where does penetrating that demographic rank among players’ strategic priorities at the moment?
How much of an impediment are the upfront costs for providers to join up with a name such as Privia? Are providers willing to accept lower revenues on the fee-for-service side, or lower overall savings, until value-based capabilities are realised?
What has been the timeline for a provider group to begin realising savings on managed populations as tech engagement capabilities mature? I appreciate this will vary substantially by practice, region and patient mix.
Looking at respective growth strategies, what qualities are Privia, Agilon and Aledade looking for in terms of the providers they’re choosing to partner with? How do they weigh factors such as provider reputation but also the market as you discussed, so geography, addressable population and so on?
How competitive is the provider recruitment environment currently, especially for some of the more sought-after groups with prestigious reputations?
What are your thoughts on the current supply shortages and general ageing population of US providers? How much could this drag on recruitment efforts and industry growth longer term?
What does it take, strategically and operationally, to get a provider ready to adopt value-based care models for managed populations?
How important is provider autonomy to some of the physician groups when looking for a solution to partner with? How much weight do providers attribute to staying on their existing EMR [electronic medical record] platform, maintaining independence over practice operations, etc, especially in light of other structural changes that need to be made moving to value-based?
What do you think is a realistic membership growth rate for the next 3-5 years as the space becomes more saturated? I appreciate this will vary substantially by company maturity and execution, but how do you see provider membership penetration for major players trending?
Looking at some of the no-upfront-cost names such as Aledade, what are some of the major risks with that model? Especially if savings take longer to realise or are not realised at all, how do you view those dynamics unfolding, especially in the current macroeconomic environment?
Why do you think some of the large health systems and academic medical centres have historically been opposed to working with some of the organisations we’ve discussed?
Agilon announced its strategic partnership with MaineHealth in March 2022, unlocking 1.1 million residents across 12 hospitals and 1,700 providers. What are some of the key differences in these partnerships from some of the independent physician arrangements? Do you see more players shifting in this direction?
What threat does an end-to-end offering such as UnitedHealth Optum pose to some of the pure-play provider services names? How much increasing encroachment could we see from some of the large payers in this area? What’s the risk to Privia, Agilon and Aledade?
What does the endgame look like for the value-based provider services players? What diversification or additional growth channels exist?
Which particular specialties do you think might be most attractive for some of the companies to expand into first, perhaps from either a margin augmentation or market penetration perspective?
Is there anything else that we have not touched on that might be especially important to highlight about the provider value-based care services space?
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