Interesting situation, I wonder what were the main issues behind their inability to update their operational model. It seems a little too bizarre that they simply would not implement the operational consolidation strategies you listed. You mentioned that they purchased mainly airlines in the low value segment and/or ones financially in trouble. Was there was a lack of planning on which airlines would complement them the most and that lack of initial planning was the main issue causing their inability to effectively consolidate?
While they seem to provide an effective preventative care model, their business model would worry me in their ability to adequately create value that their business clients can actually see. Since they only perform ambulatory care, the businesses need to purchase additional health insurance for any inpatient care that’s still needed. So while they may create cost savings, they still require the client to carry all of the risks. What makes them preferable to more comprehensive preventative care coverage (like an HMO)? I would be curious to know if they have looked at partnering with hospitals and expanding their value proposition to cover both inpatient and ambulatory services.
Interesting article though I do agree with Surabhi’s point of view, it seems like a partnership with CHI would have been a better alignment with their business model. I wonder what the perspective/incentive was from BCH with this adjustment as the loss of these elective procedures could have dropped the efficiency of their perioperative unit. Since they are using the same surgical teams from BCH, do they have a revenue sharing agreement with BCH? (Since I believe they employ their anesthesia staff) Is the volume and/or surgical staff availability of the room high enough to run at capacity? It seems like it would have been more efficient to build the procedural rooms at BCH instead assuming this was done as a partnership of some sort. perspective.