While the number of acquisitions dropped in the third quarter, there were some sizeable deals, led by the merger of UPMC and PinnacleHealth. Private equity firms acquired six physician practices in the quarter.
Hospital and physician practice mergers and acquisitions slowed in the third quarter of 2017, according to HealthCareMandA.com.
“Despite the lower number of hospital deals in this quarter, some sizable health systems merged or were acquired,” stated Lisa Phillips, editor of the Health Care M&A Report.
“PinnacleHealth (1,267 beds) and UPMC merged, and NantWorks LLC acquired BlueMountain Capital’s majority stake in Integrity Healthcare (1,650 beds). We expect to see a few more of these large mergers in the fourth quarter,” Phillips said.
According to HealthCareMandA.com:
The number of hospital acquisitions slipped to 15 in the third quarter, down 32% from the 22 publicly announced acquisitions in the second quarter of 2017, and down 21% from the 19 announced deals in the year-ago third quarter. None of the transactions disclosed a purchase price in the third quarter of 2017.
The largest group of acquirers were not-for-profit hospitals and health systems, with eight acquisitions announced by seven buyers. St. Luke’s University Health Network, a not-for-profit system in Pennsylvania, announced two acquisitions, as did publicly traded HCA Healthcare.
Among the sellers, two financially troubled publicly traded hospital companies divested four hospitals through four announced deals. Community Health Systems sold two hospitals in the third quarter, and its 2016 spinoff, Quorum Health, also sold two. HCA acquired the two Community Health Systems hospitals, one in Texas and one in Florida.
Physician medical group M&As also dipped slightly in the third quarter of 2017 to 28 transactions, a 10% drop from the second quarter.
“This third quarter’s deal volume may seem disappointing, but it is more in line with transaction volumes we’ve seen in the third and fourth quarters of 2016,” Phillips said.
The 28 transactions were a decline of 15% from the third quarter of 2016. The first quarter of 2017 represented the highest level of physician medical group M&A activity in several years, with 59 deals.
Even with the decline in deal volume, spending increased 91% compared with the previous quarter, to $1.45 billion.
Four companies announced two acquisitions apiece in the quarter: CRH Medical Corporation, Envision Healthcare Corporation, MEDNAX and Riverchase Dermatology and Cosmetic Surgery.
Eight of the acquired medical groups had 20 or more physicians, compared with three in the second quarter.
Hospital companies or health systems announced three physician medical group acquisitions in the third quarter, while private equity firms announced six, not including transactions announced by physician medical groups backed by private equity firms.
Data show that the rate of mental health/substance abuse-related ED visits increased 44% from 2006 to 2014, with a 414% increase in suicidal ideation visits. Alcohol-related disorders were the most frequent mental health/substance abuse-related ED visits.
The number of emergency department visits covered by Medicaid increased by 66% while the number covered by Medicare rose by 29% from 2006-2014, according to a statistical brief from the Agency for Healthcare Research and Quality.
In that same span, ED visits covered by private insurance decreased by 10%, AHRQ said.
In addition, the AHRQ data found that:
There were 137.8 million emergency department visits in 2014, with a rate of 432 per 1,000 population.
The number of ED visits increased 14.8% from 2006 to 2014, during which time the U.S. population grew 6.9%.
The rate of ED visits for medical conditions increased 11.7% from 2006 to 2014. Diagnoses involving abdominal pain were the most frequent medical diagnoses for ED visits in 2014 (6 million visits).
The rate of injury-related ED visits decreased 12.9% from 2006 to 2014. Among injury-related ED visits, sprains and strains were the most frequent first-listed diagnoses in 2014 (5.8 million visits).
The rate of mental health/substance abuse-related ED visits increased 44% from 2006 to 2014, with suicidal ideation growing the most (414% increase in number of visits). Among mental health/substance abuse-related ED visits, alcohol-related disorders were the most frequent diagnoses in 2014 (1.5 million visits).
Cleveland Clinic ACO saved more than $42 million across 71,113 beneficiaries in 2016 as a participating provider in the Medicare Shared Savings Program. Most of the savings came from reducing big bucket expenditures around inpatient stays, readmissions, and post-discharge care.
Cleveland Clinic’s accountable care organization has seen two years of solid savings under the Medicare Shared Savings Program. This year, the provider generated savings of $42.2 million, of which the clinic will receive nearly $20 million, a 20% increase over 2015, according to the Centers for Medicare & Medicaid Services.
James Gutierrez, MD, president and medical director of the Cleveland Clinic ACO, spoke with HealthLeaders Media about the success of the shared-savings program. The following is a lightly edited transcript.
HLM: How many physicians and patients are involved with Cleveland Clinic’s ACO?
Gutierrez: All of our employed staff physicians in both northeast Ohio and Florida are members of the ACO. We are talking upwards of 1,500-1,700 physicians. It keeps growing. In addition, we have about 300 primary care physicians employed by Cleveland Clinic in northeast Ohio, and probably 50 in Florida, and another 50 independent private practice primary care physicians in northeast Ohio who are members of our clinically integrated network called Quality Alliance.
Patient-wise, in 2017 we have about 85,000 patients. In 2016 we had just a little over 69,000.
HLM: Were you surprised that you’d generated $42 million in savings in 2016?
Gutierrez: We were surprised in 2015 because that was our first year of participation and we didn’t have a baseline in terms of familiarity. We were just gaining familiarity with the CMS claims data set that we received as part of the program but didn’t have any sense of where we would wind up until we got the final reconciliation.
Based on what we learned in 2015, our actuarial and analysis staff developed some modeling to predict how we would do at the end of 2016. They did a pretty good job of getting us in the ballpark. The $19.9 million for our share of the savings was in line with the range that we expected to see. It made us feel good that our predictive model was pretty good in understanding what we get from CMS and being able to monitor that through the year.
HLM: What is your projected savings for 2017?
Gutierrez: We are going back and forth with CMS now about the calculation of the benchmark. It looks like we will be roughly in the same range (as 2016), but we are waiting until the end of this month to get an updated benchmark from CMS to get a better idea of how our performance will compare with that benchmark. So, stay tuned.
HLM: Where do you find the savings?
Gutierrez: You break down the big buckets of Medicare spend. In 2016, we saw about an 18% reduction in the inpatient spend for our attributed population and about a 32% reduction in skilled nursing spend for that population. Those were really the key drivers, along with smaller improvements in high-end imaging utilization and emergency department utilization. But, it was mostly the inpatient and skilled nursing. We also saw a 9% reduction in 30-day readmissions, which certainly contributed to the bottom line.
HLM: Could these savings have been generated in a fee-for-service environment?
Gutierrez: We started to really focus on value and reducing utilization, where that was possible, back in 2013. Everybody saw what was coming with accountable care and value. So, we started to focus as a system on trying to improve access, develop care coordination for our highest utilizing patients to keep them out of the hospital and the ED, and we developed a more robust programs to reduce readmissions for people who were admitted.
We started to build that foundation several years before we started with the shared savings in 2015. We got into it at the right time because we had put things in place to start to cut out the spend where there was room to be found, and the shared savings program came into play when there was an opportunity to harness that.
HLM: Is this level of savings sustainable?
Gutierrez: Obviously, it’s going to get harder and harder as we continue to benchmark against ourselves and we keep cutting the fat out of the system.
However, our part of the country, northeast Ohio and the Midwest in general, is a less-advanced market than the coasts or other parts of the country. Our level of per-beneficiary, per-year spend is still relatively high so there is still opportunity there. But, in 2015 and 2016 we were picking that low-hanging fruit. It’s going to be more of a challenge for sure. We realize that.
HLM: What is it about the ACO model that allowed you to find savings?
Gutierrez: We’ve done a couple of things in recent years that helped us. No. 1, although we don’t own skilled nursing facilities at Cleveland Clinic, we have our own nurse practitioners and physicians caring for many of our patients at our highest-volume SNFs. This group has been out there for more than five years and they have been on the front lines improving quality and reducing unnecessary and managing length-of-stay in the SNFs. We reaped some benefits from our Medicare Advantage plans earlier in this decade and now we are seeing it in the ACO as well.
The second thing is we were very active in the bundled payment initiative, specifically for total joints. We rolled out total joint bundles across our system in 2015 and part of the success there is about being more comfortable bringing people home after a joint replacement rather than having them pretty much mandatory stay in a SNF.
Not only did that help us with total joint replacements, it teaches people in the hospitals, discharge planners, physical therapists, and most importantly physicians, that we need to have a comfort level with sending people home. The patients prefer it. There are less complications and infections. If you pick your patients well they do quite well in that setting. There is a halo effect that extended to other medical and surgical patients who left our hospital and avoided SNFs altogether.
HLM: Is leadership’s role different in an ACO?
Gutierrez: We really needed our leadership going back to the early part of this decade clearly and regularly saying that we need to move toward value. This is the train coming down the tracks. We need to get on or run over.
In terms of operationalizing it, that took place in the trenches. Every hospital ward, every community hospital had efforts going on around readmission reduction, primary care across all of our practices. We got engaged in care coordination and trying to get the message of value out to the front lines.
We had terrific quality results in 2016 for the ACO. We had a robust and engaged quality group that were frontline people in our practices figuring ways to close care gaps, get better diabetes and hypertension control, improve preventive care, improve screening for depression, etc. I was those small tactical wins that got us to the results we’ve got.
HLM: Is your replicable elsewhere? If so what needs to be in place?
Gutierrez: We followed a fairly standard roadmap for succeeding in terms of attacking the big buckets of spend; reducing readmissions, ED visits and SNF stays. The thing that put us in a great position to be successful was that the bulk of the physicians and patients were Cleveland Clinic attributed. As a medical staff model group practice with a single employment structure and single leadership, it made it much easier to align. We are still a big battleship to turn, but at the same time we all work for the same entity, so that made it easier to get that message across and work together to get these results.
A lot of ACOs, where you have a clinically integrated network of physicians who are more independent and you have several hospitals, it is much harder to get everyone to work in lock step. You can get there and some people have had tremendous results, but it’s harder to get that engagement when everyone is more independent.
HLM: Anything else?
Gutierrez: We made significant investments in population health analytics and health IT. When you are managing a population of 85,000 beneficiaries and you have this huge claims data set and a huge clinical data set that is coming out of our EHR, which is Epic, having the analytics to crunch that big data helped us identify who our highest-risk patients are who we need to care coordinate aggressively, who are our potentially high-risk patients who we can reach out to proactively and address care gaps and get them under control. That helped us in 2015 and 2016. As time goes on our folks are getting better using that analysis to help us.
With a quality score of 96.3%, the accountable care organization demonstrated that it could deliver high-quality care and improve the value of the healthcare dollar.
Cleveland Clinic’s Accountable Care Organization saved more than $42.2 million across 71,113 beneficiaries in 2016.
That’s according to a Centers for Medicare and Medicaid Services report for ACOs participating in the Medicare Shared Savings Program.
“The ACO helps to unify our enterprise by bringing together primary care, specialty care and independent participating physicians,” said James Gutierrez, MD, president and medical director of Cleveland Clinic ACO.
“The care model is further enabled to manage our patient populations across the whole continuum of care,” Gutierrez said. “This validates the work we have done in recent years to provide outstanding quality of care while being better stewards of healthcare resources.”
The Cleveland Clinic ACO:
Generated $42.2 million savings in 2016, which represents a 24.5% increase from 2015.
Will receive $19.9 million back in shared savings, a 19.8% increase over 2015.
Increased the number of shared beneficiaries by more than 6,500 and the health system’s quality score was 96.3%.
In 2016, there were 433 Medicare Shared Savings Program ACOs across the United States.
The Ohio Hospital Association is about halfway through a 124-hospital, statewide initiative to reduce sepsis mortality by 30% by the end of 2018. Data shows the initiative is working and the target is attainable.
About 1,486 lives have been saved since the Ohio Hospital Association began itsstatewide initiative to reduce sepsis deaths in 2015. A new status report details the progress that’s been made in combating the single most expensive condition in the nation’s healthcare economy. Mike Abrams, president of the Ohio Hospital Association, spoke again with HealthLeaders Media about the progress being made. The following is a lightly edited transcript.
HLM: You’re about 18 months into a three-year initiative. How’s it going?
Abrams: Our goal is by the end of 2018 to have a reduction in sepsis mortality of 30%. We’ve achieve about a 13.5% statewide reduction. I sense a real enthusiasm and a real momentum on our side. You see from the report there has been great uptake on the part of our membership.
Anytime you can make people intellectually curious about a situation, that is half the battle. We have stimulated a lot of discussion and interest in prioritizing this problem. One of the elements of that is a deep and abiding commitment on the part of hospital and health system leadership. The C Suites are committed to resolving this issue.
I always remind audiences when I speak around the state that sepsis is the single most expensive condition in the US healthcare economy. Not only is it costly in terms of human life, it’s very costly for the overall economy of our country. This is something that health systems across the country need to make sure they are prioritizing.
HLM: Are the tools to reduce sepsis already in place? Is it just about increasing awareness?
Abrams: It goes a little farther than increasing awareness, although that is a huge part of it. We have to educate the people throughout the chain of healthcare providers, whether they are licensed professionals or people who are providing healthcare in the home or people driving ambulances. It’s about increasing their awareness. This is something they need to be curious about and interested in, and know the signs of sepsis, and what to do once they’re confident that they have a patient who might be septic. Also, during the handoff period between various providers, we have to make sure each level of care is interested in whether sepsis is an issue with a certain patient.
HLM: Can you explain some of the numbers around your reductions targets?
Abrams: The target rate is 14.9% but the goal is to reduce it by 30%. We did the math the other way around. We felt like a 30% reduction was a stretch goal, frankly. It was not going to be easy. But if we reduce it by 30% that mathematically puts our new rate at 14.9%.
HLM: Are you finding that it’s more difficult to nudge the percentages down now that you’ve plucked the low-hanging fruit?
Abrams: In some ways yes because we have done a really good job of informing our providers about the three-hour bundle and educating our people that this is a race against the clock. When we look at what is next, we are in that second tier of activity. We need to bring it to that next level.
There is the technology that we are talking about that includes working with our electronic health records, and a technology called Capnography, which measures CO2 in respiration. We are piloting with CMS (Centers for Medicare & Medicaid Services) because, when they start using this a little more aggressively, it is going to be a big indicator that they may have a patient who is septic and who needs treatment.
HLM: How are you using EHRs to fight sepsis?
Abrams: At hospitals they refer to alarm fatigue, and there is a little bit of that going on with alert systems in EHRs. You have constant alerts and pop-ups and you can’t always judge which are greater and which are unlikely. We are trying to improve the alert systems in the EHRs. We are also looking at how we use big data and biomarkers. Can we use big data, for example, to show that certain patients with certain characteristics are more likely to be septic than patients with other characteristics? For example, we might learn that certain BMIs or age cohorts or other characteristics might indicate that a patient is at greater risk of sepsis.
HLM: What will you focus on in the remaining months of this initiative?
Abrams: Frankly, one thing is keep doing the things that have been working so far. We want to layer in some new initiatives like this pilot program to see if it works. We want to continue our collaboratives in an all-teach-all-learn environment, where we have people who are curious about programs that are working in hospitals. They are interested in what their sepsis data shows, and they want to learn from each other. The hospitals who are knocking it out of the park can help the ones who might be struggling.
We don’t want to stop what’s working but we do want to layer in new initiatives. I referred to the PDSA Cyclefor physicians. “Plan, Do, Study, Act.” Look at initiatives, pilot them and assess if they are bearing the results we need. If they are, work on spreading them.
Auditors found that CMS made 1.8 million adjustments to Medicare capitation payments over a three-year period and recouped nearly $3 billion that had been paid on behalf of dead people.
The Centers for Medicare & Medicaid Services was “generally effective” in ensuring that capitation payments to Medicare Advantage contractors were not made for dead beneficiaries, a federal audit found.
The Department of Health and Human Services’ Office of the Inspector General examined CMS’ payments from 2012 through 2015. The auditors found that CMS made 1.8 million adjustments to capitation payments, and recouped $2.96 billion from MA organizations for Parts A and B capitation payments that had been made on behalf of dead beneficiaries.
The federal government paid more than $616 billion Medicare Advantage payments for the three-year span examine by OIG.
CMS did not identify and recoup all improper capitation payments, however.
"As of March 7, 2017, CMS had not recouped $2.4 million associated with 1,817 capitation payments that were made on behalf of 978 beneficiaries. For our audit period, these improper payments represented .0004% of the total capitation payments made to MA organizations and .08& of the total adjustments that CMS made after receiving information on beneficiaries' dates of death," OIG said.
"We recommended that CMS recoup the $2.4 million in capitation payments made to MA organizations for Medicare Parts A and B services on behalf of deceased beneficiaries, and that CMS implement system enhancements to identify, adjust, and recoup improper capitation payments in the future," OIG said.
CMS concurred with the recommendations and said corrective actions had been implemented.
Despite increased use of online resources to inform health decisions, a new survey shows that the 75% of registered voters are not using emerging healthcare innovations such as online health records and e-prescription services.
Nearly 60% of people use online health resources such as WebMD as a substitute for primary care, according to a new survey from the University of Phoenix.
"The healthcare industry is shifting to a patient-centered model that harnesses technology to both open communication channels and create a platform for patient engagement," said Doris Savron, executive dean for the College of Health Professions at University of Phoenix. "Given this shift, it is crucial that patients not only have access to these technologies, but also view them as important resources for improving their health and overall care experience."
Additionally:
48% of the 2,201 registered voters who responded to the online poll said the rising cost of insurance would be the biggest challenge facing the healthcare industry in the next five years, with 77% of respondents indicating that prescription drug coverage and monthly premium costs were very important when selecting healthcare coverage.
Only 25% of respondents who have access to health technology use resources such as e-prescription filing services (26%), online health records (25%) and online appointment booking services (15%).
Patients have strong feelings about the qualities that clinicians should have in traditional care settings. The vast majority of Americans find it “very important” for their treatment teams to have interpersonal skills, including listening (84%), verbal communication (83%) and bedside care (71%).
"The data shows that technology is just one piece of the puzzle when it comes to patient care," Savron said. "Although new technologies are resources that we should lean on to help improve communication, interpersonal skills are the foundation for ensuring patient trust and better care."
The survey was taken in mid-August and has a margin of error of plus or minus two percentage points.
Health spending growth in August was only 4.3% higher than one year earlier, and observers say the relatively slow pace is in response to a leveling-off in insurance coverage.
Fueled by the fight over the Affordable Care Act and structural health sector changes, healthcare price growth in August rose by only 1.2% compared to a year earlier, according to Altarum’sHealth Sector Economic Indicators Briefs.
This is the lowest health price growth rate recorded in almost two years, and just slightly above the all-time low. Contributing to overall slow price growth is a historically low Medical Consumer Price Index growth rate, a possible signal of relief for healthcare consumers with substantial out-of-pocket expenditures.
The 12-month moving average of the Health Care Price Index fell to 1.8% growth after being at 1.9% for six months, dousing any expectations of a return to a 2% growth rate range in the near term. Year-over-year hospital price growth fell to from 1.5% to 1.3%, and physician and clinical services price growth fell one-tenth to .5%. Annual drug price growth fell to a 2.7% rate, its lowest reading since growing by 2.4% in December 2015.
Despite an upward revision to recent estimates, health spending growth in August 2017 was 4.3% higher than a year earlier. The moderation in spending growth is in response to a leveling-off in insurance coverage.
Healthcare job growth also remained modest, with 22,500 new jobs added in September 2017, slightly less than the 2017 average of 25,000. Slow hospital job growth in 2017 is a primary force behind the health sector growing at about three-quarters the pace of 2015 and 2016.
In August, the health share of gross domestic project fell to 18%, exceeding $3.5 trillion. Spending growth in August increased in all major categories, led by home healthcare at 6.5%. Hospital spending continues to grow slowly, at a 2.3% rate.
Anthem says its list is an in-house screening tool to identify non-emergent care in the ER, but emergency physicians say it's a violation of the prudent layperson standard and could harm patients.
Emergency physicians say Anthem Blue Cross Blue Shield has created a "secret list" that contains about 2,000 emergency department diagnoses that the insurer will not pay for.
"There are things on there like 'chest pain with deep breaths' which we know as clinicians could be pleurisy but it could be a pulmonary embolism or a collapsed lung or influenza," says American College of Emergency Physicians President Rebecca Parker, MD.
"Thousands of people die from influenza every year," she says. "It’s like looking for a needle in a haystack and patients shouldn’t have to figure out whether or not they have an emergency."
Parker says ACEP learned about Anthem’s list from its state chapters in Kentucky, Georgia and Missouri.
"Anthem has to abandon this policy. It is bad patient care. It is not the way to look at appropriate use of acute care services," Parker says, adding that Anthem’s diagnoses list violates the prudent layperson standard — which is in the Affordable Care Act and in many state laws.
Instead of denying ED claims, Parker says Anthem should improve its provider network and expanding access points for care beyond the emergency department.
"Patients need to know that their insurance will cover them when they have emergency symptoms. We don’t want patients trying to make that decision at home," she says. "I don’t want someone clutching their chest wondering if they are going to be covered by their insurance company. People will die."
Anthem Responds
Jay Moore, MD, a senior clinical officer at Anthem, says ACEP is mischaracterizing how diagnoses screening lists are used. He says about 95% of all ED diagnoses codes Anthem processes are approved automatically without review, and that only "5% or less, depending on the market" trigger a flag.
"There is no 'secret black list code' that you are automatically not covered and we aren’t going to pay for a diagnosis," Moore says. "We told ACEP several times but I think they are marketing it this way because they don’t like the policy in general."
"It’s a screening list of diagnosis code that flag that case for review," he says. "It is designed to get on top of a trend that we have seen for some time in emergency rooms. We are seeing more and more people across all payers showing up who have less-than-emergent conditions. I’m talking about things like literally athlete’s foot or a headache, and I don’t mean a migraine; things we wouldn’t consider emergencies."
In the rare occurrences when a diagnosis is flagged, Moore says, it starts a review process that considers mitigating factors.
"A nurse starts by looking at the case and they make a determination as to whether the person is a child, or if it was a weekend or holiday where an urgent care might not be open" he says. "The other check is how close a person lives to urgent care, because you could go there instead of an emergency room."
"If someone lives in the country they may not have good Internet or many healthcare providers and the emergency room might be their best option, even for something that is relatively minor. We approve those cases regardless of the diagnosis," he says.
"If none of those exceptions are met the case is forwarded to a board-certified physician. They look at all the information the hospital sends us on a claim, including the diagnoses codes," Moore says.
"If you come in with some redness on skin that you think is an infection, but the final diagnosis will be poison ivy, that would show up on our screening list," he says. "But then we see the initial diagnosis and that would tell us why that person went to the ER. That is reasonable for someone with that condition."
Moore says the list of flagged diagnoses will not be made public "because we are refining our data and we are trying to decide what codes should and should not be on the list."
"We don’t want there to be some kind of master list that we have to keep updated and provide provider notification, and since it is just a screening list we aren’t obligated to share it," he says.
Moore says Anthem has responded to ACEP’s concerns about some of the diagnoses on the list.
"ACEP got our list and it was an early copy and it has 'chest pain on breathing.' They called us and said 'did you know chest pain on breathing is on the list?' We said, 'Hey, you are right!' so we took it off the list. It is no longer on the list of screening diagnoses," Moore says. "They continue to cite that even though they know it is off the list."
Moore says the screening list is one of a number of strategies that Anthem has developed to encourage patients to access care in less-expensive venues. Those strategies include bolstering the primary care and urgent care networks, and expanding telemedicine services.
Patients are usually notified that their claim has been denied several weeks after the ED care has been administered.
"They won’t find out in the ER," Moore says. "That would require the ER to call in the information and they would be doing a pre-certification for the ER visit and we don’t want to put that administrative burden on the ER. It will slow down the ER and reduce its mission to quickly respond."
He says patients can appeal the denial of coverage, and are told before they sign up for coverage that emergency department care is only covered for emergencies.
"You can’t have it as a primary care doctor. It’s not efficient. It’s not cost-effective, and it costs everyone else on the plan a lot of money," he says. "This is not going to affect the great majority of people. This is only going to affect a small number of claims and a smaller number of patients because it tends to be the same patients who abuse the system again and again."
Deal accelerates Express Scripts shift away from fee-for-service to value-based care; establishes platform to advance medical benefits management services.
Express Scripts today announced that it will pay $3.6 billion to acquire eviCore, the privately held medical benefits management company.
"Together with eviCore,Express Scripts will be an even more powerful partner in managing costs for patients and payers, bringing us closer to our goal of becoming the nation's leading patient benefit manager," Tim Wentworth, president and CEO of Express Scripts, said in a media release.
"By further strengthening our independent model and creating numerous opportunities for growth, the acquisition of eviCore will deliver value for our clients, patients, providers, and shareholders," Wentworth said.
The deal is subject to regulatory approval, but is expected to be completed by the end of 2017.
"The greatest opportunity to improve healthcare is by reducing wasteful spend and overutilization while delivering quality outcomes," said eviCore Chairman and CEO John Arlotta. "Together, eviCore and Express Scripts will be uniquely positioned to tackle these problems."
Bluffton, SC-based eviCore contracts with health plans and commercial clients to manage medical benefits for 100 million people in areas that include radiology, cardiology, musculoskeletal disorders, post-acute care and medical oncology. The company has approximately 4,000 employees and will operate as a standalone business within Express Scripts.
St. Louis-based Express Scripts, the nation’s largest pharmacy benefits manager, said the acquisition provides "an attractive entry point into a growing market."
"Today, pharmacy is an industry with approximately $400 billion in annual spend. Healthcare spend represents nearly $3.4 trillion. Medical benefit management is a large and growing market with more than $300 billion spent annually in the areas eviCore manages today," the company said. "Establishing a cornerstone platform in this market will enable Express Scripts to build a uniquely comprehensive suite of solutions, with significant opportunities for cross-selling to both client bases."
Express Scripts said the cost containment capabilities and expanded client base achieved in the acquisition "will create an even more powerful partner for our clients, fully aligned with the interests of patients and payers."
"This will further differentiate Express Scripts and position the company to take advantage of the transition to value-based care and the increasing demand from payers for a more comprehensive set of service offerings and solutions," the company said.
eviCore investors include General Atlantic, TA Associates, and Ridgemont Equity Partners.
