Physician practices are being integrated by well-resourced, innovative "superpractices," a group whose operations specialize in right-sizing hospital care. (If you haven't read part one on how to spot a superpractice, start here)
But how concerned should you really be?
Superpractices may not seem like much of a threat today. They're often not the dominant player in their market—and most markets don't have any superpractices. But we don't think that will last long.
Industry leaders should assume superpractices will enter and gain influence in almost every market. This is especially true if we use partnerships like VillageMD with Walgreens or Amazon's acquisition of One Medical as any indication. We haven't seen (nor do we anticipate) superpractices taking over an entire market. That said, they are well-positioned to skim savings from existing inefficiencies and overtreatment.
Stakeholders can either proactively adapt to the prevalence of superpractices or be forced to react. Here are our early predictions for what the emergence of superpractices means for major stakeholders.
For independent groups: More options for potential partners and ownership models
Superpractices offer independent physician groups alternatives to being acquired by a health system. Physicians can choose from practice support to full corporate integration.
For example, Aledade does not employ its physicians but partners with practices to provide the necessary capabilities for them to remain independent. On the other hand, entities like Tia, One Medical, and Chen Med offer employment and attract physicians by the mission and design of a new-in-kind care model. Over time, physicians not affiliated with a health system won't be able to afford not having some involvement with a superpractice.
For health systems: A choice to wield their hospital assets in partnership with superpractices—or hyper-consolidate to keep power
Many health systems are already feeling the impact of superpractices in their market—and recognize that volume loss is inevitable. The choice is what role does a system want in controlling these shifts in patient care. Health systems have a few main options:
- Bet on sub-specialization: By hyper-specializing in sub-specialty care, systems can defend their position and strive to become destination acute care centers similar to an academic medical center (AMC).
- Expand your own network: By evolving outpatient care options to create a superpractice analogue or continuing local mergers and acquisitions, systems can ensure negotiating power when a superpractice enters their market.
- Partner with a superpractice: By proactively bringing superpractices into their market, systems can build capacity, right size assets, and coordinate care effectively across their local market.
If market conditions have room for capturing market share through referrals, it's likely superpractices will increasingly partner with systems.
For payers: A decision to reduce cost of care by partnering or building a superpractice analogue
Many payers have aligned with superpractices to avoid unnecessary hospital use and cut costs. Payers will have to decide whether to invest in existing superpractices, like Anthem with Privia, or build their own superpractice analogue, like OptumCare or CenterWell (part of Humana).
When doing this, payers need to be aware that this may result in health system backlash—and could make it harder for them to offer broad networks. Payers face significant competition between each other and also retail players (Walgreens, CVS, Amazon, Walmart) who are also seeking to vertically integrate and expand national clinic footprints using one of the superpractice models.
If market conditions reward lower cost care options and condition management, plan and purchaser partnerships with superpractices will likely rise.
For vendors and suppliers: An opportunity to collaborate on care standards and real-world evidence generation
Superpractices already exert control by standardizing treatment protocols, planning, and referrals for their practices—and superpractices may see value in building out their own services or technologies (as many have already).
Vendors or suppliers would be remiss not to proactively partner with superpractices or risk losing some level of market penetration. For these partnerships, companies must re-evaluate their value articulation, clinician engagement strategy, and the type of evidence generation needed for physician partnership.
No one can sit still. Superpractices will continue to grow and gain power—whether you're partnering with them or competing against them.