Skylight Health Group Focusing On A More Holistic Approach

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Prevention is better than cure.

Much of the United States healthcare system is based on a fee-for-service (FFS) model. The focus is on the volume of sick patients, meaning there is little obvious financial incentive for doctors to truly look at a patient’s overall health; it is a numbers game more than anything.

The alternative approach is a value-based care (VBC) model where the focus is on keeping patients healthy and minimizing unnecessary health expenditures, thereby placing the emphasis on quality care per patient and not volume.

When an industry is the size of the $3 trillion U.S. healthcare system, the potential for disruption is huge. And multi-state Skylight Health Group Inc. SLHG SLHG wants to disrupt it big time by encouraging health providers to adopt the VBC model.

Inertia Can Reign

It can be a tough sale. 

Overwhelmed doctors spend a significant amount of time working on administrative issues as they seek reimbursement for their services under the prevailing FFS model. Shifting to a VBC model could be costly and time consuming.

That’s where Skylight comes in, acting as a white knight by offering a national platform to independent primary care providers (PCPs) that provides access to capital, technology, improved contracting and participation in established VBC programs. The PCPs are key as they are the first point of patient contact, influencing more than $2 trillion of downstream healthcare spend and likely to extend their influence further as healthcare costs continue to rise.

Skylight has begun consolidating the highly fragmented PCP sector and acquired eight primary care practice groups in the past year. The acquisitions contributed annualized revenue growth of $35 million in 2021. 

To support the consolidation, Skylight announced earlier in April a joint venture with Collaborative Health Systems (CHS), ​​a population health-management services organization, to integrate essential VBC services into Skylight’s growing enterprise of primary care practices. CHS is a wholly owned subsidiary of Centene Corp. CNC.

Skylight’s focus is on the Medicare population. Medicare allows up to $12,000 reimbursement per patient, per year with a VBC approach, compared to the fee-for-service model which sees a patient reimbursement of approximately $200-$400 per patient, per year. The portion of Medicare patients, a growing segment of the overall population, accounts for about 20% of VBC models, much higher than other age groups.

The company’s goal over the next three to five years is to have in excess of 100,000 patients signed up under the VBC model.

Competitors to Skylight in the VBC space include Cano Health Inc. CANO and Oak Street Health Inc. OSH.

All are competing for what appears to be a growing focus on a VBC approach from insurers, of which only a small percentage has been converted. 

“Aetna is committed to 75% of claims being value-based by the year 2020,” said Mohamed Diab, vice president of provider transformation at Aetna, owned by CVS Health Corp. CVS. “And care management is widely known as a good strategy to improve health and reduce costs.”

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