The Salt Lake City-based health system has 37,500 employees and CEO Marc Harrison at the helm.
Biggest moves made
Intermountain was at the forefront in creating the provider-led generic manufacturer CivicaRx this year. Also, it unveiled a virtual hospital and joined a population health coalition with the Utah Alliance for Determinants of Health.
We'll be watching how CivicaRx will impact drug prices and whether the organization's new structure will allow it to compete with industry newcomers from Silicon Valley.
Intermountain, Utah's largest employer, has made waves this year. The vertically integrated health system has stabilized its debt rating, cut costs and made multi-million dollar investments in new facilities and innovation centers, all while making forays into hot button issues like drug pricing.
The nonprofit, which boasts 23 hospitals, 185 clinics and an insurance division that earned NCQA's highest private insurer rating in Utah in 2017, spent this past year spinning out startups, forging cross-sector partnerships and investing in companies and R&D to expand its reach and diversify revenue.
Jessica Sweeney-Platt, executive director of physician performance research at athenahealth, told Healthcare Dive that Intermountain has managed to strike an "enviable" balance between doing well financially while deftly addressing the needs of a diverse patient base.
Much activity this year was enabled by a structural overhaul spearheaded by CEO Marc Harrison, who has been in the role since October 2016. At the time, Intermountain was struggling with a narrowing operating margin and had incurred losses of $392.5 million due to the ACA's risk corridor program. To make matters worse, Intermountain's bad debt had increased 41% year over year to $215.3 million in 2015.
Harrison is overseeing a turnaround. Moody's said in June that it expects Intermountain's operations will improve due to a focus on cost reduction, adding that the health system has "dominant market share, solid debt coverage and strong cash levels." The company assigned an Aa1 rating to Intermountain's 2018 revenue bonds and upgraded its outlook from negative to stable.
Notably, Intermountain has spent the past year making staffing changes and reconfiguring its organizational structure. Since April, the health system has transferred nearly 2,300 of its billing staff to a revenue cycle company in which it bought a 20% stake, outsourced nearly 100 of its IT employees, eliminated 396 positions, created 107 new positions and redesigned job functions for more than 1,000 employees. About 67 employees — 0.2% of its workforce — were left unemployed after the restructuring, according to Intermountain.
Not everyone was pleased with the shake-up. The process was reportedly rocky for a number of employees, and Intermountain paid the price: In describing a low-morale work environment to local press, 15 current and former employees expressed feeling that the restructuring was too harsh considering the health system's financial and clinical successes.
That financial success has allowed Intermountain to invest in initiatives like Civica Rx, the generic drug manufacturing firm it launched with a number of other nonprofit healthcare providers this year. The goal is to give hospitals access to 14 yet-to-be-disclosed generic drugs that have been in short supply and rising in cost, for a single price.
"It's a direct shot across the bow to PBMs driving up pharmaceutical prices," Sweeney Platt, who recently spoke with Harrison for athenahealth's podcast Decoding Health, told Healthcare Dive.
Rob Allen, COO at Intermountain, told Healthcare Dive the system "wrestled for years" with how to manage drug costs.
"We've seen increases in cost for medications for no apparent reason that just drive up the costs for consumers dramatically. That’s really concerning to us," Allen said. "We think this has to be addressed in some way."
Intermountain's recent moves in population health, telehealth and precision medicine are also worth noting.
The system has invested $12 million in the Utah Alliance for the Determinants of Health, a coalition of community organizations and government agencies seeking to make inroads into social determinants of health.
The health system grabbed also headlines earlier this year when it announced the launch of Connect Care Pro, its "virtual hospital" comprised of more than 40 bundled telehealth programs provided by more than 500 clinicians, nurses and pharmacists. It also spun out Alluceo, a digital platform that aims to help providers deliver team-based mental health services as a routine part of primary care.
Intermountain Precision Genomics, the health system’s vehicle for researching and developing genetically-targeted approaches to cancer treatment, launched PRECISE, a study that builds a cache of genomic data from frozen tissue and blood specimens, earlier this year. Intermountain’s precision medicine efforts are also supported by its investment fund, which backs and pilots genomics startups such as PierianDx and Syapse.
Looking ahead: Much of Intermountain's activity this year has caught industry interest, especially the launch of CivicaRx. Moving forward, all eyes will be on the outcomes of that activity. Like any other legacy healthcare company, Intermountain will have to find ways to compete with tech giants like Amazon and Google storming the industry's gates.
If health systems don't figure out how to deliver on affordable, value-based care, those companies will "tap in and take your money," Allen said. "We continue to see ahead of us significant pressure on affordability and a significant challenge from the world of technology, as well as opportunity. We think there will be a lot of players coming to the table."
Whether or not Intermountain's new organizational structure will give the health system a competitive edge in the coming years will be worth watching.