Major payers
like Cigna are overlapping finalizing of previous mergers and acquisitions
deals with new partnership announcements that aim to strengthen payer identity.
Payers
are pairing the news of finalized 2019 mergers and acquisitions with new
partnership announcements, like Cigna which announced three
new partnerships in its recent fourth quarter 2019 earnings call.
Cigna is
using this year to finalize its Express
Scripts acquisition, but the company already has plans in place
to pick up three strategic partnerships.
“At a
philosophical level, we view that the notion of partnering and beyond
partnering, striving to be the undisputed partner choice is a competitive
advantage and something we want to build on,” said David Cordani, president and
chief executive officer at Cigna, on the recent fourth quarter of 2019 earnings
call.
“Why? It
accelerates pace of innovation, it accelerates value creation, whether it be
around affordability, predictability, simplicity, it could broaden speed and
absolute reach within the marketplace.”
The Cigna
executive outlined three partnerships that the company looks forward to
initiating this year.
The
company’s new partnerships will expand its pharmaceutical network through Prime
Therapeutics. This year the company gained 2.7 million pharmacy customers. With
the Prime Therapeutics partnership, the company anticipates a 20 to 23 percent
year-over-year growth.
Could a
variety of partnerships in one sector with different breadths—such as combining
the narrowly focused Prime Therapeutics with the broad customer base
of Express Scripts under the Cigna umbrella—lead to the dilution of a payer’s
relationship with its customers? Cigna executives did not express concern that
the payer would be limited by the Prime Therapeutics partnership at all.
“This
further broadens our reach and our opportunity to serve more lives, both
individual customers and patients and a broader portfolio of health plans as we
go forward,” Cordani explained. “So we're delighted by securing this and we
look forward to beginning to serve that relationship in the second quarter of
this year.”
Cigna has
already agreed to offer solutions to small businesses with Oscar
Health.
Until
now, Cigna has not created offerings for very small businesses that have under
100 employees. Oscar Health is the ideal partner with which to shift into that
territory for two reasons, according to Cordani.
First,
Oscar and Cigna’s philosophies overlap. Oscar’s digital infrastructure on a
small business level matched Cigna’s technological focus on middle and national
markets.
Second,
Oscar exhibited strengths in areas that Cigna had not yet explored. Whereas
Cigna can offer the value-based provider networks, patient engagement, and
clinical behavioral healthcare capabilities, Oscar provided access to the
smaller business markets with which Cigna had not yet connected.
Cigna
also intends to join forces with healthcare professionals, particularly
Medicare Advantage preferred provider organizations. The company is looking at
a 13 to 16 percent increase in Medicare Advantage customer base, so bringing in
more healthcare professionals for this population will be a critical step for
2020.
Cordani
explained that the company intends to expand its footprint into new counties
adjacent to existing markets.
To handle
these new markets and the new patients coming
resulting from the ESRD
proposed rule, Cigna will be broadening its
preferred provider organization (PPO) platform, building on their individual
health maintenance organizations (HMOs).
The
company draws confidence in its ability to manage the larger footprint from its
high Medicare
Advantage Star Ratings. In 2021, Cigna expects to cover 87
percent of its Medicare Advantage customers in plans with four stars or higher.
“Our
value-based provider relationships and our high engagement programs are
well-positioned to coordinate the care of the services as reinforced by the
stars rating and as reinforced by our overall performance,” Cordani said.
Between
these new partnerships, Cigna expects to expand its footprint of customer
growth by ten to fifteen percent each year for the next five years.
“Each of
these examples gives a clear view of how diverse healthcare stakeholders view
Cigna as their best partner for future success and how being the partner of
choice in healthcare marketplace will contribute to our sustained
differentiated growth over time,” Cordani stated.
Cigna’s
moves in pharmaceutical manufacturing, small business, and Medicare Advantage
highlight the 2020
trend of payers using their partnerships to underscore or
establish a company identity. For Cigna, these partnerships will largely
reinforce the company’s image as a technology leader.
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