Nonprofit Health Systems Launch Longitude Health to Boost Care Delivery

The new entity, jointly owned by Baylor Scott & White Health, Memorial Hermann Health System, Novant Health, and Providence, was officially introduced last week. 

Four prominent nonprofit health systems have joined forces to launch Longitude Health, a for-profit holding company that aims to improve care delivery and operational performance. 

The new entity, jointly owned by Baylor Scott & White Health, Memorial Hermann Health System, Novant Health, and Providence, was officially introduced last week. 

The systems will collectively invest millions annually to fund and launch operating companies, targeting critical areas in healthcare over the next year.

Focus on Operational Impact

Longitude Health’s executives have outlined a clear vision for the company’s role in healthcare innovation. The company plans to launch three operating companies over the next 12 months, which CEO Paul Mango stated will "materially impact performance" within 18-24 months. 

The CEO further emphasized that the initiative’s goal is not about growth for its own sake but improving care capabilities.

"We've learned through COVID that bigger is not better. Better is better," he added, highlighting that the focus will be on capabilities rather than structural growth.

The operating companies will have independent boards and management with a broad scope for innovation—from artificial intelligence to value-based care models. According to CEO Mango, this approach allows the systems to preserve capital while achieving more collectively than each could individually.

Addressing High-Cost Treatments and Care Coordination

The first of the three operating companies, set to launch by year-end, will focus on enabling providers to dispense costly monoclonal antibodies for conditions such as sickle cell disease and cystic fibrosis. 

Many treatments require specialized capabilities including advanced billing systems, patient authorization processes, and data-sharing technologies.

“We are at a critical inflection point 25 years after the human genome was characterized. This company is building the foundational capabilities to participate cost-effectively in this shift," Mango said.

Next, the company will focus on enhancing care coordination for Medicare beneficiaries under member systems’ Medicare Shared Savings and ACO Reach programs. 

The shift comes in response to recent regulatory changes in Medicare Advantage programs, which have tightened risk assessment and quality ratings.

Mango noted that Medicare Advantage's "easy money" is behind the industry and that future success will require transforming care delivery. 

"We’re developing the business to permit health systems to be central players in that value chain," he said, noting the importance of a coordinated approach between providers and specialists.

The third company, set for a mid-2025 launch, aims to address patient frustrations related to post-discharge billing. This initiative will work with member health systems and external health plans to offer patients a consistent out-of-pocket cost estimate for entire episodes of care, minimizing billing surprises.

Collaborative Approach to Healthcare Challenges

Longitude Health was born out of early 2023 discussions among the health systems, led by Baylor Scott & White CEO Pete McCanna and retiring Providence CEO Rod Hockman. 

These executives recognized the need to tackle post-pandemic challenges collaboratively rather than through consolidation. Mango pointed out that the shift in strategy reflects the systems’ understanding that the traditional model of aggregating assets no longer guarantees success.

"For the last 30 years, the competitive advantage has been superior structure. But those days are over. Now, it’s about capabilities," Mango said. 

The four founding systems have committed capital for multiple years, allowing Longitude Health’s board, made up of the CEOs of its member systems, to make quick investment decisions. The company also plans to expand its membership, targeting 12 to 15 additional health systems. This will ensure that new partners align with the existing members’ goals and avoid competitive conflicts.

"We're entertaining potential partners that share the belief in cooperation. Everything we do may not equally benefit every member, but in the end, everyone will be better off," the CEO added.

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