photo of puzzle pieces being put together

Healthcare Consolidation: How Non-Traditional Partnerships are Improving Consumer Options

photo of puzzle pieces being put togetherIn our first #lifecare series blog post, we addressed how consumer knowledge shifts are driving change. Through advances in technology, in particular, consumers have better access to information about their health and are playing a more prominent role in their health-related decisions. They are responding with increased demand for more and better information.

To keep pace with this demand, traditional and non-traditional entities are joining together to provide lifecare solutions that benefit the consumer as well as the industry. In a whitepaper we co-authored with HealthScape Advisors, we define lifecare as a new, consumer-centric ecosystem that offers integrated health-related services across the full continuum of consumer needs.

In this post, the second of our 2018 lifecare series, we explore how mergers, acquisitions and affiliations – formal and informal – are rapidly transforming the healthcare industry. They are giving rise to enhanced, consumer-oriented product offerings, many of which include incentives for healthy consumer behaviors, as well as new opportunities for deeper engagement between providers and consumers. This is a logical progression in the lifecare model’s consumer-centric approach.

While consolidation efforts between traditional providers (i.e., horizontal integration) continue to make waves, the mergers and affiliations between traditional and non-traditional players (i.e., vertical integration) are perhaps more intriguing. According to the American Hospital Association’s 2018 Environmental Scan, we can expect more of these vertical partnerships. They not only address consumer needs, they benefit providers by offering access to new capabilities, and they aid non-traditional entities by granting access to larger patient populations.

This #lifecare series focuses on how consumerism is driving change across the healthcare industry. Click To Tweet

These types of affiliations range from large organizations merging with or acquiring others, to organizations of any size joining with unlikely partners to provide innovative, value-added solutions.

One example is Quest Diagnostics. Quest, a lab test leader with access to more than 20 billion test records, recently partnered with Safeway and to provide consumers with convenient access to a variety of testing services. While Quest has been active in empowering consumers through its direct Patient-Initiated Testing product, it has further expanded access to physician-prescribed testing through neighborhood Safeway locations. Approximately 50 Safeway stores offer onsite lab services for these tests., through its AncestryDNA service, identifies and quantifies an individual’s ethnic origins based on DNA testing. Quest provides genotyping test services, which ultimately can provide insight into family health history.

Another example making headlines is the pending acquisition of healthcare insurer Aetna by CVS Health. While the $69 billion deal announced in December 2017 has yet to pass antitrust review, the implications of such a combination are significant. Together, the companies could provide most basic consumer health services. The new organization aims to transform the consumer healthcare experience using the analytics of Aetna combined with CVS Health’s physical presence at 9,700 retail pharmacy clinics and 1,100 walk-in clinics nationwide.

Through closer alignment with doctors, pharmacists, and other healthcare professionals and health benefits companies, the companies are pursuing the creation of a platform that focuses on consumer well-being and ultimately reduces costs. From a consumer perspective, here’s how this particular consolidation might affect the healthcare setting:

  • Streamlined Consumer Services: From primary care to outpatient services, consumers may find a more streamlined experience focused on their needs. In addition to convenient access to a health provider for minor illnesses, collocated pharmacies are expected to include space for wellness, vision and hearing exams and care, nutrition education, and medical equipment. While the expansion into tertiary services such as vision and hearing exams may be years in the making, the ramifications for consumers and providers alike are evident. Payers are moving closer to the consumer and the communities they serve through these partnerships, while consumers are gaining more convenient access to care and, ideally, reduced costs for all parties.
  • Lower Costs: If CVS MinuteClinics combine with home care services—and ultimately offer telehealth—this arrangement could encourage preventive care to take place in a setting with lower costs than hospitals and other formal settings. With today’s steady rise in healthcare costs for consumers—and no reversal in sight—this is an appealing position. This goal was highlighted in the joint statement released by the two companies: “This transaction fills an unmet need in the current healthcare system and presents a unique opportunity to redefine access to high-quality care in lower cost, local settings whether in the community, at home, or through digital tools.”

At the heart of delivering streamlined, coordinated care is access to patient data. If done well, the combined company will have a holistic view of the patient’s needs and services provided—across medical and pharmacy areas—providing powerful insight and building valuable knowledge. While the logistics and execution of this deal, should it be approved, will be challenging, the upside holds potential to bring lifecare ever closer to the consumer.

At the local community level, other partnerships are making impressive inroads as well. Bryan Health, a Nebraska-based nonprofit health system, recently released a Compendium of Best Practices that illustrates how hospitals in the region have created innovative approaches to improve the health of their communities. Affiliations with fitness centers, schools, city governments, businesses and others are extending care beyond hospital walls to promote wellness and meet consumers’ desires to be more proactive in their health.

As healthcare leaders continue to pursue cost and operational efficiencies while meeting higher consumer expectations, real opportunity lies in industry collaboration. Whether on a large scale or small, focusing on consumer health and well-being will ultimately benefit everyone.

About the Authors
Julie Amor, President and Chief Strategy OfficerCarol Dobies, CEO and Founder of Dobies Healthcare GroupJulie Amor, President and Chief Strategy Officer for Dobies Healthcare Group, brings more than 20 years’ experience elevating healthcare brands. Julie co-authored this article with Carol Dobies, our CEO and Founder, who has been bringing healthcare brands to life for more than 25 years.

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