SCALE Case Study:
Sell-Side Preparedness: Market Study & Business Plan Validation
Client Profile
-
Size:
17 Providers -
Location:
TX -
Specialty:
Pain Management
Services Deployed
Market Research
Payer & Regulatory Research
MSO Strategy Consulting
Business Analytics
Overview
SCALE was engaged by a pain management MSO, in collaboration with a sell-side investment bank, to perform a market study and business plan validation assessment. The Company’s business model was centered around a differentiated MSO partnership model targeting and custom-tailored to service the specific needs of community hospitals.
The Company’s innovative business model presented compelling growth opportunities but represented a unique approach to servicing the market.
As such, key objectives included:
- Validating demand for the Company’s services amongst key market stakeholders including payers and community hospitals
- Evaluating payer and regulatory reimbursement trends that could support the Company’s value proposition and / or result in pending business headwinds
- Analyzing the Company’s business plan, target growth plan and supporting financial model to prepare for go-to-market process and prospective buyer diligence
Execution
- SCALE deployed its market & payer research and consulting teams
- Client needed report delivered in six weeks
- SCALE developed a detailed market & payer research approach based on broad knowledge of the payer landscape and different sites of service
- In depth discussions with payer representatives and relevant industry experts
- Review of all CPT codes by provider and site of service
- Review of reimbursement characteristics for professional and facility claims
- SCALE leveraged its relations in the industry and payer space to assess long-term viability of mode
- Researched historical precedent for moving cases to HOPD under 100% hospital ownership
- Assessed likelihood of push-back from payers
- Reviewed current landscape relating to pain management and considerations from payers regarding evaluation of utilization levels for particular services
- SCALE developed a bottoms-up model on a provider basis, based on their CPT codes, practice patterns and sites of service
- Assessed reimbursement levels under various scenarios (HOPD, ASC and office), as well as hybrid scenarios
- Stress tested acuity of pain management cases and provider location to ascertain assumptions for what could be performed at an HOPD site
- Reviewed management service agreement, HOPD profitability, and profit to Client’s business based on its underlying cost structure
Results
- Developed thoughtful presentation that could be used by Client as a document for discussion with potential private equity buyer
- Summarized key insights from market & payer research to support the Company’s value proposition
- Augmented the Company’s business plan & financial model to provide clarity on the potential of the business model and align the Company’s business model with key findings of SCALE’s analysis and market & payer research
- Quantified potential profitability based on current footprint, as well as revenue and profitability under different site of service assumptions
- Developed and articulated an optimum strategy for number of HOPDs and allocation of providers under current footprint
- Created parameters for future HOPD partnerships and necessary location and demographics of new providers
Let's SCALE together
SCALE Healthcare is based on the foundation of a singular focus – elevating management performance across healthcare services. We are focused on the entire suite of operational advisory and diligence services exclusively to healthcare service organizations, with local team presence across 10 states.
Unlike the many consulting firms that offer more narrow and often more impractical solutions borne of limited or very general expertise, we rely on our team of 75+ carefully selected senior operational healthcare experts to ensure we provide the most relevant and value added experience across the full range of management disciplines and clinical specialties that fall within healthcare services.
