How Anthem's Vivity venture is faring in Southern Calif. showdown with Kaiser
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October 23, 2015 01:00 AM

How Anthem's Vivity venture is faring in Southern Calif. showdown with Kaiser

Brett Brune
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    In the year since Anthem Blue Cross painted a target on the back of Kaiser Permanente in Southern California, the insurer says its fledgling alliance of providers called Vivity exceeded its enrollment target and lured more than half its members from Kaiser. But it's also still just beginning to build the data infrastructure to allow its hospitals and doctors to function as a truly integrated network.

    Vivity—pitched as an integrated network of seven high-value health systems, including Cedars-Sinai Health System—has signed on 13 large employers to the low-cost narrow network, including seven that weren't previously Anthem customers. It has enrolled 24,000 members, compared with 15,000 projected before it launched, and 60% to 70% of them used to belong to Kaiser, according to Paige Rothermel, Anthem's vice president and general manager for California large group plans.

    That suggests Vivity is off to “a reasonable start,” said Erin Trish, an assistant research professor the University of Southern California who studies health insurance competition and regulation. “As time unfolds, employers will have a little more sense of understanding how effective this model is in terms of controlling costs and producing high-quality outcomes for their employees.”

    The biggest obstacle Vivity faces is convincing people who are happy with Kaiser that they should consider other options, Trish said. “Perhaps people who have been in a Kaiser plan don't have experience at these other hospitals. Now, whether or not these are the hospitals that they ultimately want to go to, time will tell.”

    Kaiser, so far, says it's still gaining members and market share in Los Angeles and Orange counties, where Vivity staked a claim in September 2014. “We have not seen lots of impact” from Vivity's entry into the market, said Wade Overgaard, Kaiser's senior vice president for health plan operations. Overgaard said Kaiser has enjoyed high retention in its individual and large group plans where it competes with Vivity, though he declined to provide specific numbers.

    Another significant challenge for Vivity is achieving the level of data integration among its component providers that allows Kaiser to give patients a seamless care experience. “A member going to any one of Kaiser's facilities has all their medical vital statistics available to the physician” via electronic health records, Overgaard said, “which truly propels us above and beyond what others have available to them today.”

    In addition to Cedars-Sinai, Vivity's network is made up of Good Samaritan Hospital and UCLA Health, both in Los Angeles; Huntington Memorial Hospital, Pasadena; MemorialCare Health System, Fountain Valley; PIH Health, Whittier; and Torrance (Calif.) Memorial Medical Center.

    Last year the health systems and Anthem said they would initially rely on Anthem's claims records to coordinate care. They recently hired Accenture to build a software system that will allow clinicians to see patient data anywhere in the network of independent providers, which don't all use the same information technology platforms.

    Vivity will only be sustainable, Rothermel said, if Anthem is able to use the “clinically integrated platform we are going to create” to deliver more efficient care. “If Vivity is affordable, it will continue to do well.”

    The technology will allow Vivity to reduce waste such as redundant lab tests ordered by different doctor's offices, she said. “It is not necessarily operational efficiency as much as it is using big data to reduce how much care is delivered.”

    Doug Sturnick, vice president of managed care at Cedars-Sinai, called the task of pooling the clinical data of the Vivity partners “a tremendous amount of work.” Cedars-Sinai started offering the network to its own employees on July 1.

    “It's a new health ecosystem that is being built amongst people who previously competed and still do compete in other areas,” Sturnick said. “We're all aligned around doing the right thing, and we are on same team—and historically that has not always been the case with providers and insurance companies.”

    Anthem and the health systems participating in Vivity agreed to share financial risk for the network's patients, with employers paying a capitated fee for each enrollee. Employers that signed up for it won't know until June or later whether it has proved cost-effective and otherwise competitive.

    The California Public Employees' Retirement System was among the first employers to go live with Vivity, on Jan. 1. So far, only about 2,500, or 1%, of the about 226,200 actively working CalPERS members in Los Angeles and Orange counties have chosen an Anthem HMO through which they access the Vivity network, compared with more than 87,000 enrolled in Kaiser Permanente plans in the two counties.

    Even after CalPERS gathers a year's worth of crunchable data, it will need to wait six months for all the claims to run through the system, according to Doug McKeever, its deputy executive officer for benefit programs policy and planning.

    But CalPERS is enthusiastic about the experiment. “For one of the first times, the (health) systems are really on the hook to make sure their costs are considered in the overall capitated amounts that we pay for our members.”

    Brett Brune is a freelance reporter in Los Angeles.

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