HOPCo buys Stryker's value-based care convener business

Practice Management

Phoenix-based Healthcare Outcomes Performance Company acquired Stryker Performance Solutions' BPCI-A value-based care convener business and segments of the SPS health system orthopedic service line analytics subscription business.

HOPCo is a musculoskeletal value-based health outcomes management provider. The company delivers service line and practice management services to organizations focused on orthopedics, spine, sports medicine, pain management and more. It has an integrated care and analytics platform that aims to improve patient care and program revenue while cutting care costs.

With the acquisition, HOPCo has become one of the largest musculoskeletal bundled payment program conveners and the largest orthopedic service line managers in the U.S. HOPCo will assume Stryker's interest in a Buffalo, N.Y.-based clinically integrated network and license Stryker's RecoveryCoach, and online patient engagement portal, and its orthopedic hospital-reported outcomes analytics tool.

HOPCo already provides population health, bundled payments and other value-based care programs to affiliated practices and hospital networks. The new acquisition will add to its suite of population health tools as it moves closer to value-based care.

Several SPS employees will join HOPCo's health system and value-based care management division as part of the acquisition. Stryker said it will turn its focus to robotics after the sale.

"Stryker will continue to focus on the expansion of its Mako program analytics offering and execute on the company's future vision with SmartRobotics," said Brian McCrone, vice president of Stryker's Performance Solutions. "Our data analytics focus on Mako will complement the services HOPCo will provide."

DeLyle Manwaring, executive vice president of market transformation at HOPCo, discussed the decision to acquire SPS and where the company is headed with Becker's.

Question: What is the strategy behind acquiring Stryker's Performance Solutions' value-based care business?

DeLyle Manwaring: With the integration of the seasoned customer management and data analytics teams and tools from SPS, we can continue to scale and help align stakeholders to drive their market transformation. The experienced executives from SPS will supplement our existing teams and help more HOPCo partners improve operational efficiencies, patient outcomes, financial performance and will help lead the transformation into value-based care.

Q: How do you plan to integrate this acquisition into HOPCo's value-based care programs?

DM: The bundle convener business fits seamlessly into our current risk-based contracting portfolio and will be well supported by our team of former insurance company C-suite executives, actuaries, data scientists, medical economics experts and care transformation managers. Similarly, the hospital analytics team and hospital reporting tools is an ideal fit within our orthopedic service line optimization and market transformation offerings.

HOPCo currently manages global risk for over 26,000 ICD-10 codes related to musculoskeletal care and has extensive prior experience in bundled payment programs. That experience gives us a unique ability to help the SPS existing clients achieve even better performance and an expanded opportunity for more advanced program participation than they have been able to accomplish. For example, many bundle participants focus solely on post-acute utilization to realize savings. Our experience is that there are many more levers that can be pulled to maximize savings. We are excited to work with all SPS current clients to help them achieve the full potential of their bundles. These partners are already forward-thinking organizations who have voluntarily opted to participate in bundles. However, bundles can be a race to the bottom and are generally not long-term sustainable programs, so we treat bundles as a first step into value-based care and risk contracting.

They will now be empowered with HOPCo's platform to move beyond the bundles and develop value-based care programs that manage the entire continuum of musculoskeletal care. We look forward to working with these partners to develop networks that take fully capitated, global risk and are enabled with HOPCo's extensive toolkit and claims analytics platform to optimize success in these programs.

Q: SPS includes the episode performance manager, an outcomes management software, RecoveryCoach and hospital-reported outcomes analytics tools. What do these products and capabilities add to HOPCo's capabilities?

DM: We have known about SPS' products for years and feel very fortunate to now have them as a complement to HOPCo's suite of existing IT tools and predictive analytics. As we assessed these tools through the due diligence process, we felt there was a significant opportunity to broaden their focus from several orthopedic subspecialties to a more all-encompassing management of a hospital's entire musculoskeletal service line. SPS tools, paired with HOPCo's service line transformation platform, translates into meaningful operational efficiencies that can be put into action for any health system in the country. HOPCo has invested tens of millions of dollars into the development of a suite of clinical decision support tools, outcomes-tracking capabilities and medical economics analytics. However, it really is the combination and synergy of our evidence-based care pathways, diagnosis-based protocols and order sets, predictive analytics, outcomes reporting, benchmarks, and a very large, specialized, and experienced team that will provide a more complete picture around the delivery of musculoskeletal care, and this is where true market transformation happens.

Q: Where do you see the biggest opportunities to partner with payers and other organizations on bundled payments?

DM: As Dr. Wael Barsoum, our newly appointed president and chief transformation officer, often says, 'There is a blue ocean of opportunity for payers, health systems and surgeons to work together to better manage the musculoskeletal space and to do so in a way that is truly transformational.' It has been our experience that, by stakeholders partnering together, rather than working against one other, there is a massive opportunity from a financial, operational, quality and market share perspective. So, we see that the opportunity goes well beyond just bundles and extends into managing the entire continuum of musculoskeletal health. HOPCo achieves this by creating specialized incentive models that align all stakeholders.

Healthcare is not a zero-sum game, and our model proves the adage that a rising tide lifts all boats. Payers, hospitals, physicians, vendors and patients can all win together when the proper infrastructure, model and incentives are in place.

Focusing on only bundled surgical episodes leaves about 80 percent of the opportunities to improve care and lower cost on the table, since so much more of a diagnosis’ cost lies outside the surgical episode as opposed to in the surgical bundle. In spine bundles, for example, only about 10 percent of the cost of back pain is addressable in the bundled model. Access to, and effective management of, that other 80 percent can only be achieved when the payer, health system, surgeon and other providers in the market are taking risk together and all share in the savings. That is what HOPCo's platform, tools and claims analytics make possible.

It truly is remarkable and energizing to see what can be achieved when these parties work together toward the Triple Aim of improving patient care, improving the health of a population and reducing the cost of care.

Q: What trends are you seeing today that will drive orthopedic care over the next 12 to 24 months?

DM: As the demand for orthopedic care continues to grow in the US due to an aging population, we will continue to see downward pressure on fee-for-service reimbursements and more cases moving to the outpatient setting.

Many health systems are participating in bundled payment programs or have done so in the recent past. But we believe there are inherent weaknesses in this model, as the bundle pricing continues to annually rebase, and the resultant opportunity for savings continues to get smaller, making the model unsustainable in the long term. I believe we all need to pivot quickly and transition to sustainable value-based care initiatives and population health models that truly bend the cost curve and solve the financial pressures healthcare is creating for our society. Luckily, these models also increase financial performance for providers and facilities while saving money for patients and payers.

This second significant trend is the transition of many surgical procedures into the outpatient setting. As you know, CMS has proposed removing 300 inpatient-only procedure codes over the next three years. However, this does not mean that all joint replacements or other orthopedic inpatient procedures should be performed exclusively in an outpatient setting. Within orthopedics, we see continued need for acute care facilities, but also the need for the development of a tiered approach to appropriate facility selection for a given patient with a given set of diagnoses.

Now more than ever, there will be winners and losers in healthcare. We are already seeing the early stages of this phenomenon in certain markets. HOPCo believes that the winners will be those providers, hospitals and health systems that rise above their competitors and fundamentally transform their service lines to become the preferred destination for patients, surgeons and payers. On the provider and facility side, groups need to partner with experienced and vertically integrated organizations that can provide them the infrastructure they need to remain competitive and lead transformation in their market. Size alone is no longer going to protect organizations from these pressures. They must get better and more integrated as they get bigger. Unfortunately, often the opposite is true. None of this is easy, but it's coming, and it's coming quickly.

Q: What is next for HOPCo?

DM: Well, hopefully we will get some sleep one of these days! HOPCo has seen significant growth in the last few years, and this is now accelerating. We currently provide services to over 100 hospitals and physician groups. We are continuing to expand our large executive team of former C-suite leaders from the insurance, health system, IT and practice management arenas. We look forward to working with many more physician and hospital partners in the future and believe that our work has demonstrated improvement in outcomes for patients while lowering costs for society. Our programs have resonated with organizations across the country, and our results have helped drive the conversation around value-based care on a national level. We plan to maintain that forward momentum into 2021 by continuing to partner with like-minded visionary physician practices, payers and health systems across the country. Each new partner of ours has unique challenges. So, with every new tool and every new leader, we add to our organization, we further hone our skills in delivering results for our customer partners and patients.

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