Podcast: An Inside Look at Mount Sinai’s Consumer-Centric Supply Chain

In this episode of the Oliver Wyman Health Podcast, Sam Glick, Partner in the Health & Life Sciences division at Oliver Wyman, chats with Niyum Gandhi, Executive Vice President and Chief Population Health Officer of Mount Sinai Health System, about how Mount Sinai is providing value to its healthcare customers.

For this episode and more, check out the Oliver Wyman Health Podcast page, featuring executive conversations on the business of transforming healthcare, available on iTunes, iHeartRadio, Soundcloud, Google Play Music, Stitcher, and Spotify. Or, just tell Alexa, "Play Oliver Wyman Health Podcast."

“The general thesis we have at Mount Sinai is purchasers — such as governments, employers, or individuals — do not get value for the dollars they spend. Unfortunately, there are a lot of delivery systems that wouldn’t admit that to themselves. But we believe there isn’t value for the healthcare dollar,” Niyum says.

To level the imbalance between cost and benefit, Mount Sinai executives are creating consumer-centric healthcare services by forging partnerships with insurers and realigning incentives internally.

“Healthcare is the only industry in which we dump all of the components in front of consumers and ask them to organize the supply chain themselves. Our approach is to take that burden back upon ourselves and provide a seamless experience for both consumers and purchasers of healthcare,” Niyum explains.

“Between the health plan, the health system, and the physician network, we have many pieces of the supply chain. We stitch it together and we then have a product we can sell,” Niyum says.

For example, the health system and Oscar Health have been working together for several years on a carefully curated provider network that includes three health systems (Mount Sinai, Montefiore, and the Long Island Health Network). The partnership also includes an Oscar-branded primary care clinic in Brooklyn, which is unusual in the healthcare industry because Oscar oversees the clinic operations while Mount Sinai provides the medical care.

“The results are positive. The medical loss ratio’s trending in a great direction. Oscar has had high member retention rates and high member satisfaction as we made the transition from a broad network — which is what Oscar had before we launched this partnership — to a narrow network,” he says.

A similar example is Bright Health. The insurer and Mount Sinai are launching a Medicare Advantage product in January of 2019 in which Mount Sinai will be the only health system providing services to Bright Health’s enrollees in New York. When you’re working with a new market entrant whose entire business model is dedicated to provider partnerships or narrow networks, the insurer doesn’t need to worry about whether or not the relationship will cannibalize some other part of their business, Niyum says. That’s not to say partnerships built around a narrow provider network won’t work with large insurers, he says. In fact, Mount Sinai and United Healthcare have this type of relationship in the large group insurance market.

“It makes perfect sense to work with UnitedHealthcare for that because you can sell the PPO side-by-side with the narrower network — UnitedHealthcare’s Nexus Accountable Care Organization product. And that can be a very compelling story to tell a large employer,” Niyum says. “It’s very clear this is a priority for UnitedHealthcare. There are people on their team who wake up every day thinking about how to make Nexus work."

Niyum has several suggestions for how providers and insurers should approach their partnerships to achieve the success Mount Sinai has had. First, Niyum recommends they start from scratch with a white sheet of paper.

“We’ve had a lot of fun with Oscar, saying, ‘Just because traditionally one organization does x or y doesn’t mean we should do it the same way in this arrangement.’”

Second, he recommends they ink contracts rather than formal joint ventures. “In this space, we’re finding we can be nimble if we don’t over-engineer our relationship from a governance standpoint,” he says. But rather than feeling pressure to nail down every detail in a contractual arrangement, Niyum suggests setting up a joint operating committee to make some decisions after the partnership is up and running.

In addition to forging new relationships with external organizations, Mount Sinai’s also refining its internal operations to create a culture that embraces the idea of delivering value-based healthcare services. For example, Mount Sinai has redefined productivity standards in compensation models for primary care physicians, moving away from formulas based on relative value units to those based on risk-adjusted panel size with metrics for total cost of care, efficiency, emergency-department utilization, and quality.

Mount Sinai also is restructuring how it measures the performance of managers at its clinics, creating what Niyum calls an end-to-end profit and loss (P&L) across the fee-for-service and risk-based parts of the primary-care enterprise. We want to have the right incentives for middle management,” Niyum says.

Niyum sums up Mount Sinai’s approach to delivering seamless and consumer-centric healthcare services by explaining, “We’ve found time and time again if we deliver on value, we are rewarded.”

For this episode and more, check out the Oliver Wyman Health Podcast page, featuring executive conversations on the business of transforming healthcare.