Iora Health: Redefining “Value” in Healthcare
According to a recent Boston Globe article, Iora Health “attempts to deliver cost-saving primary care through a combination of preventative care, technology, and human contact, all pulled together with a simplified payment model.”I view the greatest success of Iora Health’s performance as its ability match high-quality health care with lower costs, setting unique precedence for transformation of the mainstream healthcare system.
Iora Health is an admirable new force in healthcare, exemplifying effective alignment between its business and operating models. As a Cambridge start-up company, Iora Health has designed a business model in the form of simple, holistic, primary care that creates value for patients. It particularly targets those patients who feel discontent with predominant health care systems. According to a recent Boston Globe article, Iora Health “attempts to deliver cost-saving primary care through a combination of preventative care, technology, and human contact, all pulled together with a simplified payment model.” (2015, Shemkus) Iora’s care system functions in a way that streamlines and improves the patient experience. It captures value through strategic partnerships with organizations or companies who have a group of patients in need of primary care, charging them a monthly fee per patient and emphasizing preventative measures that decrease overall healthcare costs. Interestingly enough, Iora Health has not yet proven to be financially profitable; however, it has created and captured significant value for patients, partners, and itself via the outcomes-based approach it takes and the preventative measures it employs. For example, Iora Health sites report decreased emergency room visits and hospitalizations, capturing valuable healthcare cost-savings.
The Iora Health operating model transform’s preventative practices, human resources, physical office space, and technology into a valuable patient experience with the ultimate goal of providing superior yet less costly health care. The monthly fee payment structure overcomes the ethical challenges of the traditional fee-for-service model in healthcare, which incentivizes healthcare professionals to charge patients with unnecessary expenses. Furthermore, it reinforces outcomes-based care, removing the need for insurance companies and permitting flexibility for healthcare professionals to spend adequate time on patients without considering costs per service or procedure. In addition to roles available in traditional medical offices, such as physicians and nurses, Iora Health offers health specialists and coaches to assist patients with overcoming barriers to achieving health. Examples include finding and understanding health insurance, identifying federal/local support options, and even grocery shopping. They also serve as coordinators, attending patient specialty appointments or following their care for a better integrated approach. The physical office space is more spacious, encouraging patients to involve people from their support systems in their office visits and overall health maintenance. Furthermore, exam rooms are set up to include round tables and note-sharing capabilities, maximizing collaboration and transparency throughout health discussions. Altogether, the human resources and physical spaces are strategically placed in order to promote patient comfort during their office visits. Home visits are offered to patients who are disabled or too ill to conveniently visit the office. Technology fills the gap between office visits and at-home health maintenance, providing efficient ways for patients to communicate their health statuses to Iora Health as well as to track their own health information.
Iora Health’s business and operating models support each other in redefining the meaning of “value” in healthcare. Unique aspects of the Iora Health operating model, such as health coaches and custom-built technology, provide competitive advantages in the form of more holistic and thoughtful patient care. The care and payment structures inherent in the business model provides Iora Health healthcare professionals with the time, savings, resources, and flexibility that reinforce this operating model, making it sustainable over time. Although future expansion is likely to yield significant profits, I view the greatest success of Iora Health’s performance as its ability match high-quality health care with lower costs, setting unique precedence for transformation of the mainstream healthcare system.
Sources:
Iora Health. Retrived from: http://www.iorahealth.com/.
Shemkus, Sarah. (2015, May 04). Iora Health’s promise: Patients come first. Boston Globe. Retrieved from https://www.bostonglobe.com/business/2015/05/03/iora-health-pioneers-new-primary-care-model/kc7V4W5V8OJ0gxFqY4zBrK/story.html
Hoelly, David. (2015, January 26). Primary Care Provider Iora Health Takes In $28M to Fuel Growth. Retrived from: http://www.xconomy.com/boston/2015/01/26/primary-care-provider-iora-health-takes-in-28m-to-fuel-growth/
Alspach, Kye. (2012, August 28). Seeking to reinvent primary care, Iora Health to open Boston area medical practice.
Photo credit – http://www.iorahealth.com/model/
Thank you for your post, Quita. I think the Iora Health model is very interesting. To summarize, it’s business model is to charge a monthly fee per patient, and it’s operating model is optimized around improving patient health outcomes. The theory is that the business model complements the operating model, since doctors are not reimbursed on a volume basis but rather on the basis of the value they deliver to health outcomes.
One operational risk of this business model is the potential to withhold costly care because it would be unprofitable to provide it under a capitated system. This is similar to the issue that HMOs ran into in the 1990s. How can Iora ensure that it provides the appropriate care that might also be costly?
I think the financial question is also an important one here. Even if Iora is able to create value for the health system, will it be able to capture that value in the form of higher monthly fees? Are there perhaps ways to modify the business model to allow Iora to better capture the value? For example, could they base their fees on the patient-population’s long-term health outcomes? This latter approach seems appealing to me because it mitigates the risk of withholding care in a capitated system.