Despite significant economic challenges brought by the COVID-19 pandemic, ValueHealth Executive Chairman John Palumbo insists the digital surgical company has "never been more bullish about growth."
The Leawood, Kan.-based company is focused on leading the charge from fee-for-service to value-based care, specifically within the orthopedic, cardiovascular and bariatric fields.
It's no secret that many surgical procedures have been migrating away from hospitals and toward outpatient settings, but the COVID-19 pandemic has only amplified this trend, according to Mr. Palumbo.
"The pandemic has been a real catalyst to force it because health systems not only needed to go there financially, but we also need to protect the ability to have flexible surgical capacity," he said. "We cannot have our hospitals in harm's way by not being able to perform elective surgery."
Historically, outpatient migration was driven by economic reasons, but the pandemic has brought another contributor to the table.
"Now the shift is not just economically driven, it's also safety-driven," Mr. Palumbo said. "From that perspective, the ASC space is going to have an accelerator like never before."
With outpatient migration showing no signs of slowing down, hospitals and health systems have had to look for new ways to perform cases and compete in an evolving market.
Mr. Palumbo said it has been a breath of fresh air to see how many health systems are willing to accelerate into the value-based market. ValueHealth aims to capitalize on this amplified movement.
"We have to be able to deliver quality and experience at the right cost, which drives value," he said. "It will have to be in collaboration with health systems and key anchor physician groups, so we're able to identify how you capture market share while migrating these cases from an inpatient to an outpatient setting."
The company has partnered with several leading health systems, including Rothman Orthopaedic Institute, Main Line Health and Jefferson Health in Philadelphia, to develop its hyperspecialty surgical program for new and existing ASCs.
Now, ValueHealth is looking to bolster that program and take advantage of the rapidly evolving ambulatory surgical space.
"We're getting ready to absorb the acceleration that is now happening in the industry into a combination of shifting high-cost, high-acuity cases, which has been driven by the employer segment pressing the payers to deliver real value," Mr. Palumbo said.
"We're aiming to move 9,000 hip and knee total joint replacements in Greater Philadelphia under value-based bundle contracts out of our health system-partnered facilities," he added. "But we're also capturing a lot of the market share of competing health systems."
That market segment of 9,000 total joint replacements equates to about $323 million a year of cost, according to Mr. Palumbo.
With outpatient migration expected to accelerate throughout the pandemic and into the future, ValueHealth is setting its sights on new health system joint ventures and expanding into key market areas, including Ohio, Illinois, Florida and Texas.
Currently, the company operates nine facilities in the Greater Philadelphia market, with 10 more in the works — all of which will include spine and total joint replacement procedures.
These 10 new facilities join the company's nationwide network of 70 facilities as it looks to strengthen its position in the value-based surgical space through the pandemic and beyond.