Arjun Aggarwal

Transaction planning is critically important. But even before that, how do you know if a transaction makes sense? My partner Andrew Bachrodt helps unpack what C-Suite leaders need to consider, and WHEN.

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On this week’s Vital Signs, Nikhil Krishnan and I sat down with Bryony Winn, President at Carelon Health. Carelon Health is the diversified services business within Elevance Health, serving 1 in 3 Americans through advanced primary care, behavioral health, specialty enablement, and whole health solutions. We discuss what's top of mind for payers today, making value-based care work, creating effective provider partnerships, and more. Some highlights: ⚡ What startups stand out to her Bryony outlines 4 things that she pays attention to with startups: 1) Founders with clinical/scientific expertise who are using that to drive results. 2) Solutions that can practically plug in to existing operations. 3) Founders who are honest about their competitors. 4) Founders who show humility and understand there’s a lot to learn from the payers they partner with. ⚡ Succeeding in Value Based Care Bryony is a firm believer that downside risk is crucial to VBC. Elevance’s approach to VBC has 3 components: contract, collaborate, and connect. Beyond the details around attribution and benchmarks, they think a lot about better sharing of lessons learned on best practices as well as connecting the dots on trends that are out of providers’ control. Lastly, Bryony emphasizes that focus yields results – players for whom VBC is only a small part of their business won’t appropriately focus on it. ⚡ What’s happening with commercial payers Bryony makes 5 key points: 1) It’s a shame that employers have had to become experts on healthcare. 2) The day of point solutions is now over, and integration is the new name of the game. 3) Employers are excited about value-based care, but they don’t want to be responsible for the specific details of it. 4) Employers work to support their employee base, so many of their worries are fundamentally human worries, such as mental health, caring for aging parents, and caring for young children. 5) While much innovation has been driven by commercial in the past, there’s currently a pivot where more innovation is starting in Medicaid and expanding from there. ⚡ Payor focus areas and provider collaboration Bryony explains how payers want to be both better business and clinical partners to providers. She highlights how bi-directional data sharing with providers results in greater alignment in care decisions and thus fewer denials and overturns. On the clinical side, payers have a more longitudinal and broader view of patients’ social needs as a result of their large datasets, which should complement the proximal view of patients that individual clinicians have. Lots of great learnings from the payer perspective in this one! Listen to our full episode below: Spotify: https://spoti.fi/4gT4oN7 Apple: https://apple.co/3YgcpnV

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Looking for a quick recap of the healthcare trends from Q2 2024? Check out our Q2 2024 Healthcare Quarter in Review! Once a quarter we deliver healthcare trends, risks, opportunities, and regulatory updates directly to your inbox. Sign up if you haven’t already: https://lnkd.in/gj58RP59

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Who really decides how much your health benefits plan pays for services like MRIs? Why do insurers control network size and design? 💭 These questions are crucial as the opacity surrounding healthcare pricing and network structures becomes increasingly problematic. A recent deep dive by The New York Times, “Insurers Reap Hidden Fees by Slashing Payments. You May Get the Bill”, exposes a system in dire need of transparency and reform. One of the key takeaways is the wide discrepancies in pricing. 💡 Wide Discrepancies in Pricing: The cost of procedures like MRIs can vary dramatically within the same market, driven by the complexities of insurance networks and billing practices. For instance, MRI costs in Houston range from $390 cash to $4000 in claims data. This variability highlights the lack of standardization in healthcare pricing, making it difficult for patients to navigate their options effectively. The need for transparency in medical pricing is more critical than ever. To gain more insights into these issues, watch our interview with Kasha Ozog, CEO of Coastal Administrative Services (CAS). 📺🔗 https://lnkd.in/eGdgCMBd

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Also don’t outsource your hospital’s core services to a GPO ran by foreign PE… I do find it so odd that Vizient’s own contracts couldn’t stand on their own so they had to create a aggregation group with Mayo Clinic called Capits. (https://lnkd.in/gpiVDKvn) Which by the way Mayo Clinic is being sued because not only does Mayo control pricing on supply chain contracts for Vizient, but guess who controls pricing on their self insured insurance plan. (https://lnkd.in/guvx5mqr) Oh and as of November of last year Mayo Clinic lead their state in adverse healthcare events. (https://lnkd.in/gXsPi2sw) Should I go on or have I made my point clear on why Oklahoma hospitals should not blindly follow Vizient, Captis, and the Mayo Clinic?

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HSG Advisors Dashboard is changing the game for healthcare leaders. It provides information they've never had access to and makes it actionable so leaders can make informed decisions about competitor dynamics, service line growth, access point strategies, and much more! Ready to see a demo? Set up a time on my calendar. https://lnkd.in/gAvyUkny #healthcareconsulting #healthcareleaders #hospital #hsgdashboard #healthsystem #claimsdataanalytics

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In the latest Healthcare Quarter in Review, we cover the pressing topics shaping the industry, from AI governance to revenue cycle management and CMS Star Ratings. Whether you're tackling IT workforce challenges or ensuring compliance with upcoming regulations, this issue is packed with actionable insights. Read more here:

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Is Healthcare Too Consolidated? The Impact of Market Share on Tech & Security Laura O'Toole and Bill Russell from This Week Health discuss a critical question: Does market dominance by a few companies pose a risk to the healthcare industry? Laura & Bill confer on the potential downsides of concentrated market share, the importance of diversifying investments in healthcare technology, and how to enhance security in the healthcare IT landscape. Watch now and join the conversation! Share your thoughts in the comments below! https://lnkd.in/eQ-2ASa5 #healthcareIT #security #innovation #healthcare

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S&P: Medicare Advantage's growth a bad omen for hospitals - n8: and Many Health Systems Continue to Participate Under the Terms Dictated by the MA plans, Enabling this Abuse “Even beyond rates, MA adds more administrative and liquidity hurdles for providers. S&P pointed to MA plans’ “key strategy” of prior authorization requirements, which force providers to absorb associated refiling costs and sometimes keep patients locked in a longer hospital stay. That burden is exacerbated by insurers’ generally “high” denial rates, S&P wrote, which have led to instances where smaller providers without the resources to fight claim denials terminate their MA plan contracts and become more vulnerable to closure…. The report also notes that many MA plans have longer pay cycles than traditional Medicare. Combined with claims denials and payment uncertainty, the delayed reimbursement “can hurt cash flow and liquidity,” according to the report.” https://lnkd.in/g3-drT-S So it goes n8 #healthsystems #hospitals #valuebasedcare #medicareadvantage #valuebasedscam

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For the healthcare nerds 🏥 🤓 Kaufman Hall just released its latest (September) Hospital Flash report. As always, the data is amazing. While 2024 performance shows improvement over 2023, recovery lags pre-2020 levels for many organizations. Here are some highlights across all hospitals: ▶️ EBITDA Margins are up 11% comparing YTD 24 vs. YTD 23 but down -15% when comparing YTD 24 vs. YTD 21. ▶️ Operating Margins are up 17% when comparing YTD 24 vs. YTD 23 ▶️ Both Inpatient and Outpatient Revenue are up 9% per calendar day comparing YTD 24 vs. YTD 23. Outpatient is up 31% per day when comparing YTD 24 vs. YTD 21 ▶️ Current YTD Operating Margin across all hospitals/geographies is at 4.3%. Up from 2.3% in Oct '23, but down from 4.9% in April. Holding steady since January ▶️ Total Expenses are up 19% comparing YTD 24 vs. YTD 21 but showing "just a" 6% increase when comparing YTD 24 vs. YTD 23 Beyond the numbers, here are a couple of big trends: 🏥 Large national players have been reevaluating their portfolio of assets. Many are divesting underperforming hospital sites and shifting investment to ambulatory settings (clinics, ACS, outpatient centers, etc.) within more profitable geographies. 💪 Providers are seeing a combination of solid volume growth, favorable payer mix shifts (results from redetermination), higher commercial reimbursements, increased acuity for inpatient admissions, and greater cost control over contract labor and professional fees (contract labor down 30% from its height). 🙏 25M Americans have lost Medicaid coverage due to redetermination. Many of these lives have been moving to the Exchange, which is a significantly better payer than Medicaid, thereby improving the payer mix within health systems.

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Thanks to Leerink Partners for having me keynote their annual conference on the future of #MedicareAdvantage. I love speaking to Wall Street analysts and their clients — these guys do their homework and steel sharpens steel. I spoke to my optimism for the program despite a tough rate notice for 2025. This is an underwriting cycle. But the longer term view is mixed and dependent on the outcome of the Presidential election. If Biden is reelected, as I strongly expect, a second term could see substantial payment reforms for MA. The program has passed 52% penetration, making its payment formula increasingly erratic. And Democrats will seek to bring MA payments from 104% of FFS to 100%. I’d expect even tougher regulation of #brokers, sales agents and FMOs, resulting in further consolidation and attrition as #healthplans seek to limit their #compliance exposure. #Riskadjustment recovery audits will accelerate as the Administration tries to curb upcoding in the program. #StarRatings are marching away from member experience and toward #healthequity measures in 2027. This will make #supplementalbenefits addressing #socialdeterminantsofhealth (#SDOH) ever more important, moving from marketing and sales tactics to interventions on #healthdisparities, especially for dual Eligibles. Much of a second Biden term’s health agenda will be focused on expanding coverage through #ACA exchanges and prodding more Red States to expand #Medicaid. But their fingerprints will be all over MA, with the program approaching 60% of Medicare by 2028. 🤯 Never a dull moment in MA. Stay tuned!

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Drex DeFord Advises Simplifying Healthcare for Vendor Risk Reduction: https://lnkd.in/dDvhYsDF First Health Strategic Advisory Board Member & Healthcare Strategist Drex DeFord dives into pressing concerns around the increasingly complex, difficult to manage, and frequently targeted healthcare environment. Drex’s conversations with This Week Health fuel meaningful conversations to spur the change necessary for improving health sector resilience. We’re proud to have such a dedicated member of the healthcare cybersecurity space advising our leaders and ensuring First Health is at the forefront of digital health security innovation. For more insight into First Health’s leadership and board members, visit https://lnkd.in/gQUx5BzD or contact First Health at [email protected]. #CISO #CIO #CTO #CDO #Compliance #HIPAA #HealthcareIT #HealthcareSecurity #CyberRisk #ThirdPartyRisk #RiskAssessment #Cybersecurity #HTM #DigitalHealth #PatientSafety

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In part two of our series on care at home, we examine several key financial implications as health systems eye actively shifting care to patients’ homes. Read more here > https://owy.mn/3VwHYs4 #OWHealth

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When you buy or sell a healthcare business for the first time, you’ll acquire an entirely new vocabulary along the way. There are many key terms and acronyms that come with the territory of Mergers & Acquisition (aka “M&A”...can’t say we didn’t warn you!) Between legalese and financial terms, you’ll basically acquire a new language. To make it easier, we’ve broken down a list of common terms, acronyms, and documents with which you should be familiar when buying or selling a healthcare practice. Check it out on the blog! https://lnkd.in/g49mcVAZ

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Basic “explainer” on Risk Adjustment and a RAF conundrum. This article from The Commonwealth Fund does a good job of providing the basics of risk adjustment. It also calls out one of the major contributors to patient outcomes that isn’t captured in traditional risk models, the Social Determinants of Health (SDoH). They do a great job on this, so I won’t summarize it here. However, I think there is another factor that isn’t captured that I wanted to discuss and would appreciate some different perspectives. I’d love to get some thoughts on the following. Maybe I am simply being pedantic. The issue not mentioned in the article that I think current methodologies of risk adjustment miss is duration and management of disease. A patient with a new diagnosis of diabetes, for example, now has an elevated risk of numerous complications over their lifetime. However, that risk in year 1 after the initial diagnosis is much lower than the risk at year 10. Current risk models don’t take that escalating risk into consideration, keeping the risk adjustment fixed regardless of duration of underlying diagnosis. In addition, there are few scenarios that will impact me differently as the provider: 1) Management of this patient’s diabetes has been poor for the prior 9 years and now my group “inherits” this patient at year 10. 2) My team has helped this patient manage their diabetes very well for the past 9 years. 3) For the past 9 years, this patient’s prior group had managed their diabetes well but they have now switched into my group. As noted above, in scenario 1, that “new” diagnosis of diabetes severely underestimates this patient’s risk of needing expensive resources this upcoming year. I will be adversely impacted from something that is clinically obvious (duration of a disease increases risks) but which is not captured in the current data. To go one step farther, in frameworks 2 and 3, there is a gap between what the patient’s risk would have been without 9 years of great care and what it likely is now. However, there is no recognition of this work. That is to say, if the patient switched to a group that did a terrible job of managing diabetes, they’d receive the same risk adjustment in year 10 as my group would receive after all of our time, effort and resources had been dedicated to keeping this patient healthy. If the patient’s healthcare needs in year 10 are low because of our efforts, shouldn’t we receive more credit than a group that simply gets attribution? And, what about the prior group? How are (were?) their efforts recognized? Please share your thoughts in the comments.

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If you build it, will they come? I’ve heard countless organizations - #MA plans, #Medicaid plans, risk-bearing providers, vendors, PBMs, and retail players - say “we need to build the capabilities to XX”. Many are looking to vendors for solutions, but few vendors are ready to invest in new capabilities without contracts.  Anyone else sensing this (problematic) new conundrum? Here’s my quick take and a few ideas to break through this barrier. Many sales meetings are often held with functional departments, and often do not include the #MedicareAdvantage #StarRatings, #RiskAdjustment, #HEDIS, IT or P&L owners. We must collaborate to get those departments’ urgent needs integrated into new vendor purchases in order for new activities to meet new and emerging needs, remembering that: 🌟 Vendors are vital to your success.  🌟 Vendors operate in a more volatile environment than plans. 🌟 Vendors have smaller budgets than plans. 🌟 Vendors need signed contracts to make significant investments.   🌟 Vague RFPs waste vendors’ time and resources. Collaboration creates win-win contracts which expand capabilities of both parties. I encourage plans to: ✅ Ask vendors about their roadmap; including timing and certainty of planned enhancements. ✅ Include the #Stars, Risk Adjustment and #PartD teams in new vendor discussions. ✅ Consider adding a vendor's roadmap capabilities to contracts. ✅ Co-create with trustworthy vendors. I encourage vendors to: ✔ Ask about the customer’s unmet needs. ✔ Offer to co-create solutions to new and emerging needs with willing customers. ✔ Offer to accelerate roadmap capabilities with willing customers.   ✔ Articulate the things you would be willing to do if a customer would be willing to contract for it. This is a #MarketMakingMoment as #CMS has thrown down the gauntlet with #NewNeedsOfStars and #NewNeedsOfMA. This is a stellar time for vendors to review current and planned capabilities with a broader lens on new and emerging MA, #Compliance, Stars, #ECDS, #Interoperability, #HealthEquity, Medicaid & #SNP Aligment, and Risk Adjustment needs. If you need help, reach out to us.  #WhatGotYouHereWontGetYouThere  ⭐ ⭐ ⭐ ⭐ ⭐

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