Digital MSK Pricing and Payor Encroachment

One Interesting Finding:

I spent a fair amount of time digging into the Digital MSK pricing model this week.

Data is difficult to track down and models seem to change frequently, so take this more as a general direction than fact.

I found it interesting that all are based on utilization.

Omada and Hinge seem more focused on catering their packages to meet the needs of different patients, whereas the others are looking at a flat, simple rate across the board.

As more and more orthopedics groups go after employers, it will be important to know how the market has been primed so you can differentiate.
Price (or pricing model) is one lever but the real question will be around differentiating value.

More on that in the future.

One Thing I’m Thinking About:

I listened to the Elevance (fka Anthem) Q3 earnings call this week.
Yes, I listen to earnings calls in my free time.

Something the Carelon division President said about their approach to the MSK space caught my attention:

“When you think about high spend areas like oncology, like MSK, like renal, we have a wonderful opportunity to manage the member holistically and take full risk on those members. Now importantly, that's a big part of our strategy in terms of assuming full risk on those categories, driving earnings through Carelon, our unregulated entity, and also focusing on areas and profit pools that are growing where we have a wonderful commercialization opportunity.” and “When you think about MSK, when you think about renal, even what we're doing around the seriously mentally ill, we will be looking to not only partnerships, but acquisitions that can help us in that regard.”

- Peter Haytaian, President of Carelon

The Carelon division is an amalgamation of several roll-ups over the last decade.
For MSK specifically, Carelon really is the prior-auth division of Elevance.

What is interesting is seeing them talk about taking on more risk and managing those members, a stretch from legacy prior-auths. Many payors and private equity firms have created VBC programs for primary care. They are now setting their eyes on more specialty areas.

Full Transcript Here.

One Conversation Starter:

I’m curious, what do you think the impact will be short-term and long-term for Value-Based Care arrangements in orthopedics?
What role do Payors, Providers, and Private Equity play in it?

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