An Arranged Marriage

Oxeon recently started working with Rise Health, a portfolio company of Cambia Health Solutions, Santé Ventures and Foundation Medical Partners. Oxeon Associate Ellen Halle explores how the Rise product and team epitomize the changing healthcare environment. Winston Churchill is quite possibly the world’s most quotable man. His political life—which, by the way, included grappling with the creation of a single-payer healthcare system—was rife with commentary on international affairs. People don’t generally quote Churchill in casual conversation, but chatting with Rob Coppedge of Cambia Health Solutions is a different story. We’re discussing payer-provider convergence, but Churchill isn’t too far of a reach.

“It’s like Churchill said about the English and the Americans,” Rob begins. “They were ‘divided by a common language.’ Traditionally, it’s sort of like that when it comes to payers and providers.” However, as he asserts, the “factionality” that traditionally wracks the system is going to change.

Strong-armed by policy and rampant healthcare spend, payers and providers are now fundamentally handcuffed together. It’s an arranged marriage of sorts; not fully desired and not without struggles but ultimately resulting in the creation of something new and good.

As in any marriage, challenges are plentiful. There’s no denying that in a fee-for-service world, payers and providers are naturally positioned against one another. Payers—the irony of the name aside—have historically profited by not paying for things. Providers have historically thrived in a fee-for-service world. Of course, this disunion is what has made the healthcare system into the GDP-devouring cycle that it is today: each entity battling ever-slimming margins, each trying to extract more from the other, each moving farther and farther away from humble and patient-centric beginnings.

So the question remains: how best to make this relationship work in the long term?

Technology, not surprisingly, will play a colossal role. However, technologies that truly bridge the gap between provider and payer are few and far between, even in a world where $53 billion of healthcare M&A activity occurred in the 2nd quarter of 2013 alone.

One Oxeon client epitomizes payer-provider convergence in a number of ways. Rise Health, a Chicago-based purveyor of SaaS population health management solutions that help payers, physician practices, and hospitals thrive as all of these entities begin to share more risk in the healthcare market. Rise offers payers visibility into provider performance through a robust, actionable data warehouse; on the provider side, practice management software leverages patient-level data and patient contact to improve outcomes. Hyper-visibility combined with improved physician practice performance not only gives Rise immediate market appeal but also primes them to help both payers and providers excel in risk-based contracts.

Perhaps more interesting than Rise’s external value proposition is the team that helped craft it. Throughout its history, Rise has been developed and led by a team that bridges the traditional payer and provider worlds. Santé Ventures – an Austin-based VC with impeccable provider credentials – has been there since the beginning. Santé partner Doug French is the former CEO of Ascension Health System and has spent a career in the provider world. Before co-founding Santé, Doug led Ascension’s own venture efforts, representing the emergent interests of the nation’s largest non-profit health system.

Recently joining the Board alongside Rob, Doug and CEO Dr. Mark Crockett is Dr. Lee Wrubel of Foundation Medical Partners. Foundation Medical’s strategic Limited Partner is the Cleveland Clinic, arguably one of most well-known academic medical centers in the world.

Rise’s Board of Directors approaches the business from all angles, bringing experience with the Blues, faith-based provider systems, and a highly-branded academic hospital system. They meet in the middle– at the Rise conference table.

Doug and Santé Ventures have been involved from Rise’s inception. Decades of work within hospital systems gave Doug an appreciation for the provider’s role in a patient’s life: “Patients trust their physicians,” he emphasizes. However, change can be slow moving in large provider organizations. Few technologies exist that can translate data and analytics into actual change in how care is delivered. This, Doug points out, is where Rise differentiates itself in the provider world; the platform increases compliance and engagement on the part of the patient and helps the physician identify high-risk patients. “We felt Rise was an opportunity to supercharge the primary care medical home model,” Doug says. Lee, a physician by training, adds that the technology component is integral: “Providers are being forced to demonstrate ROI in ways they haven’t ever thought about.” Rise’s technology assuages that transition on the provider side.

Enthusiasm is equally effusive on the payer side. Rob joined Cambia in 2010 as the holding company was making efforts to intentionally diversify their strategy. Cambia is best known for its health insurance companies (largely the Regence Blue Cross Blue Shield plans) which cover 2 million members in the Pacific Northwest. In 2010, Cambia launched Direct Health Solutions (DHS) to build and support a family of companies focused on increasing the economic sustainability and consumer focus of the healthcare system. DHS has made numerous VC-like investments since then, including its support of Rise. The market as Rob sees it today is “driven by empowered customers, huge demographic change and the ubiquity of data”— all components that the Rise product offering takes into account. Rise, Rob says, “fits between the traditional encampment of payers and delivery systems and helps with the translation between the two sides.” More simply put, the platform allows payers to collaborate around performance with the providers they contract with—this is increasingly important as these contracts become more risk-heavy in the value-based environment.

At the very least, Rise brings together brilliant minds from all sides of the healthcare industry. Rob affirms that the collaboration between Doug, Lee and Mark has been a true mash-up of skillsets, bringing together payer, provider administration, physician and technology-infused strategy. “I’m really encouraged, not just about Rise, but about what strategic investors with different competencies can do when they come together.” Everyone knows that too much homogeneity in a relationship is never a good thing. Opposites attract. In healthcare, this sentiment is just being realized.

“My most brilliant achievement in life was to persuade my wife to marry me,” Churchill once confessed. Perhaps she was from the provider world.