A key challenge in healthcare today is the growing problem of spending, fueled by misaligned reimbursement incentives. As an MD/MBA student, I’ve often wondered: are exceptional, accessible care and financial/operational efficiency mutually exclusive? Iora Health, a novel, for-profit healthcare delivery company founded in 2011, is one practice that is starting to show me the answer: no. They are restructuring primary care delivery to be team-based and patient-centric. Strong alignment between their business and operating models allows them to generate success on key outcome metrics.
The Business Model
Iora’s business model has three synergistic arms, grounded in a common mission: to provide low-cost, patient-centered primary care.
- First, they offer a unique patient experience in which a team of healthcare professionals offers collaborative, goal-oriented care.
- Second, they offer a risk-adjusted capitated payment model through strategic partnerships with insurance companies.
- Third, they develop technologies such as transparent medical records that facilitate patient-centered care.
Ultimately, Iora aims to capture value through its focus on preventative care; fewer emergency room visits, reduced per capita expenditures, and reduced administrative costs through a capitated model drive improved quality and outcomes. Iora expects to receive “some sort of shared savings off expected total health care costs” to drive profitability.2,4,6
The Operating Model
Iora’s operating model parallels its business model in 4 unique ways:
- “New patient experience:” Iora delivers team-based care with nurses, physicians, and behavioral health providers. They have 4 features providing competitive advantage in the patient experience.
- Each patient is connected to a health coach who is a dedicated patient advocate “screened and hired for their ability to connect deeply with people…they are confidants, cheerleaders, and friends.”1 Health coaches are locals in the community, which promotes trust.2
- Hour long visits (vs. 15min traditionally) allow patients and their families to get to know their providers, share concerns, and set mutually achievable health goals.1
- Iora provides “integrated health and wellness” programming including support groups such as “Diabetes Club,” yoga sessions, and grocery shopping assistance.2
- Finally, Iora staff conduct home visits for particularly ill patients who may others be “lost” to the healthcare system.3
- “Fully integrating behavioral health:” Unlike most primary care practices, Iora provides on-site behavioral health screening and care1; they view behavioral health to be crucial to overall health. Traditionally, separation of behavioral health and primary care has created barriers in access to mental health services, which has tangible effects on outcomes.7
- “Say goodbye to paying by transaction:” Iora develops partnerships with insurance companies willing to try a capitated payment model compared to a fee-for-service “transaction-based” model.1 This affords care teams the flexibility to engage in care that is best for the patient, versus care that will reimburse well. Insurance companies pay a premium ($50-$60/mo) which covers an unlimited number of patient visits and required medical tests.4 Typical primary care practices cost $15-$25/mo for insurance companies, plus patient co-pays; this excludes the cost of frequent Emergency Department visits and expensive tests. 4
- “Our technology is inspired by our care:” Iora has developed technology to support its unique care delivery model:
- Text-based patient progress-tracking allows care teams to monitor patients with common chronic conditions. For example, patients with hypertension can measure their blood pressure at home, and text results to Iora for real-time advice on medication and lifestyle changes.1
- Second, the move away from a fee-for-service reimbursement model has allowed Iora to develop a patient-centered medical record which focuses on patient experience rather than documentation for legal purposes around billing criteria. Based on these data, each patient is assigned a “Worry Score,” and physicians are automatically alerted when their patients experience higher-than-expected scores, or concerning events such as hospital admissions. This prompts outreach from Iora staff to generate a tight feedback loop. Moreover, patients always have access to their medical record, further achieving the goal of patient-centered care.3,4
This video highlights some key features of Iora:
Performance & Summary
In just 4 years, Iora has achieved “35-40% drops in hospitalizations, and 12-15% drops in total health care costs relative to matched controls.” 5 Patient enrollment in their clinics far outpaced anticipated growth, with 25% patient engagement compared to the 2% industry average.1,6 The results are astounding.
Each component of their operating model returns to the central mission driving their business model: exceptional, low-cost, patient-centered care. Although Iora has not shown financial profitability yet, these early successes have secured them considerable venture funding to pursue growth strategies. It is only a matter of time until Iora achieves the scale necessary to experience independent profitability.
- Institute of Medicine,Primary Care: America’s Health in a New Era (Washington, D.C.: The National Academies Press, 1996.)