The news headlines continue to flow from Aledade, the largest network of independent primary care practices in the US. In the last month alone, it has added 450 value-based care (VBC)-focused independent practices to its network, acquired VBC analytics firm Curia and announced that Cigna’s Healthcare Medicare Advantage customers are now eligible to receive VBC from its network.
The Signify View
All three announcements speak volumes for the inexorable shift towards VBC in the US. Aledade is already deeply invested in this opportunity: more than two million patients in its network are covered by more than 150 VBC contracts across Medicare, Medicare Advantage, Medicaid and commercial payers. The company now boasts more than 1,500 independent primary care practices and health centres within the 40-plus VBC-focused Accountable Care Organisations (ACOs) it owns. And, as its network of VBC-focused primary care practices expands, demand for the resources these practices need to deliver VBC is growing.
Many independent practices struggle to deliver VBC on their own, however. Most lack the resources, clout or economies of scale to invest in IT and other care management functions as Integrated Delivery Networks (IDNs) can. Instead, they must outsource some functions to organisations like Aledade, and its (smaller) competitors like Privia, Wellvana, Enlace Health, Pearl, UpStream and Rise Health.
The Curia acquisition meets demand from Aledade’s large (and growing) practice network for improved analytics to close care gaps and improve population health. The deal also allows Aledade to maintain control of the VBC IT roadmap and associated costs as it scales its business and ACO network. But is also raises the question of why it chose to bring VBC IT in-house by acquiring Curia, rather than buying off-the-shelf or developing a solution in-house.
Breaking down Barriers
Curia’s platform uses advanced predictive analytics and tech-enabled workflows to identify patients who would benefit from certain interventions. According to Aledade, the AI algorithms extract insights from disparate data sources, provide more accurate predictions using past data, and optimise primary care workflows. In a VBC context, giving a practice the tools for highly targeted care and tailored interventions prevents unnecessary hospitalisations and care provision, reducing overall healthcare costs.
As stated, practices face various challenges in delivering VBC. Their influence on a patient’s care journey is more limited than an IDN. Barriers to VBC adoption also include an aversion by some physicians to take on more risk given the financial, operational and administrative hurdles they face; practices’ relative lack of financial resources, effective coding and billing processes; and shortages of staff to manage reporting, general care management and outreach requirements.
In response, many small independents now outsource IT, strategic care management (e.g. risk stratification to deliver clear, best practice guidelines on how to manage different cohorts in the most effective way), administrative and operational functions (e.g. manpower provision) etc – ingredients in helping a small practice operate more cost-efficiently.
Anecdotally, providers we speak to describe benefits Aledade offers them: for example, the Aledade app helping with HCC coding or telling a practice why a patient was in the ER (helping with patient outreach by getting the patient to come to the practice first instead of going straight to the ER for less serious health issues); and Aledade recommending specialists (a low-cost way to manage referrals
Unlocking the Value of AI
Aledade is one of a growing breed of organisations offering a suite of functional VBC solutions to small practices. With Curia, it now offers the data aggregation, longitudinal patient views, health insights and care management workflow tools’ functionality essential in a PHM ecosystem. This gives Aledade a competitive advantage as it can now assume direct control of the IT roadmap development and associated IT costs, to ensure it meets the specific needs it has around care management, and do so within its budget.
There is the wider, intrinsic value of AI to consider in this context too. AI can make sense of the vast amounts of data, EHRs, patient charts, labs and biometrics etc. To date, most VBC set-ups have struggled to fully access and utilise this data to inform decision-making, given that up to 80% of health data is unstructured and underutilised.
AI also helps drive greater cost efficiencies by providing a wealth of cost-related data available to VBC programmes (for example claims data on billed services, drug costs, equipment etc). AI identify areas for cost improvement (e.g. searching EHRs to confirm medical necessity of procedures, drugs that require authorisations etc). However, these features are not unique; many other IT vendors offer this. This raises the question: why did Aledade believe it necessary to acquire an IT vendor to address these requirements?
Outlier Aledade
Aledade is certainly an outlier in this regard. Most other organisations or VBC providers buy off-the-shelf or, less commonly, develop solutions in-house. But there are unique benefits to acquisition.
This way, the Curia solution can be fine-tuned to the needs of Aledade’s customers, so it exercises complete control over solution development. Aledade also has the financial muscle to continue investing in the technology so it can scale.
But why does Aledade not simply procure IT from a third party? There is a plethora of IT vendors offering solutions for VBC, from start-ups such as General Catalyst-backed Commure, established players such as Innovaccer, and big tech such as Amazon and Google. Clearly it feels that none offer IT with the feature sets it requires, or it feels it is a cost overhead it can better manage in-house. Interviews Signify Research has conducted with ACOs, and other organisations similar to Aledade, offer insight into the IT needs that other VBC vendors must focus on to dissuade other providers from bringing IT development in-house. They tell us that better integration is needed between EHRs and PHM analytic software (having separate logins for different apps contributes to a lack of holistic patient view and does little to improve care management workflow efficiencies); individual patient data may be absent, siloed, and unstructured, making it difficult to carry out effective analytics and risk-stratification processes aimed at closing care gaps, a critical task carried out by care management teams; and VBC vendors need to improve software for risk adjustment, workflows, and communication that can interface directly with EHRs and still be easy to use for providers and PHM teams.
Unless these pain points are addressed, acquisitions (and self-developed solutions) by the likes of Aledade and Privia (that also has an internal tech solution) therefore have the potential to threaten the commercial VBC IT market.
Riding the Waves
As such, the Aledade-Curia axis stands in good stead in a changing US primary care market. Although it has an impressive 1,500 primary care practices within its ACO network umbrella, and with the prospect of strong VBC-fuelled demand from thousands more, the longer-term trend is for the number of independent practices to dwindle. IDNs and large providers like Optum have developed quite a taste for primary care practices and have the resources and technology in-house to do what Aledade sells. This will need to be factored into Aledade’s thinking in the coming years.
For now, however, the Curia deal places Aledade in an excellent position. While AI is not the panacea to every VBC delivery challenge small (or any-sized) practices face in 2023, it is a prudent investment for organisations that want to use data-driven insights to improve population health.
VBC IT vendors, on the other hand, will need to be mindful of the various pain points we describe in this Insight. Failure to do so will see more ACO networks do the IT themselves, and VBC IT vendors would stand to miss out on the huge opportunity presented by a rapidly-scaling primary care sector.