Longitude Health Aims to Provide a Blueprint for the Health System Team-Up

The ambitious partnership is hoping to find success outside of the typical merger or acquisition.

Longitude Health is the latest iteration of health systems collaborating to address some of the industry’s foremost challenges.

Nonprofits Baylor Scott & White Health, Memorial Hermann Health System, Novant Health, and Providence are forming a for-profit entity that will attempt to find innovate solutions for areas of impact, potentially creating a sustainable model for partnership.

The venture isn’t an entirely new concept. Other initiatives like Civica Rx, a generic drug producer, and Truveta, an electronic health record data and analytics firm, have seen systems come together. Longitude, however, aims to be more collective, with the intention of adding more organizations down the road and sharing successful solutions with the rest of the field.

Josh Berlin, CEO of strategic healthcare advisors rule of three, wasn’t surprised to see Longitude form considering the appeal of partnering and building to tackle the domains the entity is targeting.

“Every once in a while, these organizations emerge: health systems collaborating to get things done that external vendors aren't able to do for them, that they haven’t individually been able to marshal the resources around to be able to accomplish, or just generally because they've got good collaborative relationships and perhaps it's a good way to think together and maybe it leads to something bigger long term, like the creation of the super system or super regional health system,” Berlin said.

Longitude plans to launch three operating companies initially, focusing on pharmaceutical development, care coordination, and billing.

More operating companies are expected in the future, but the three areas the founding partners are pursuing first represent a good mix of realms that are affecting all health systems across the board, which should give Longitude a clear runway to get started, according to Berlin.

“But they've also chosen three areas that although we haven't gotten right yet by any stretch of the imagination, there are already lots of players that are either saturating or near saturating the market,” he said.

Longitude’s governance model may challenge its ability to get off the ground quickly and seamlessly.

The CEOs of the founding systems—Pete McCanna of Baylor Scott & White, David Callender of Memorial Hermann, Carl Amato of Novant, and Rod Hochman of Providence—will make up the Longitude board, but it will be Paul Mango, former executive at HHS and CMS, serving as the entity’s CEO.

“These are four strong nonprofit health systems that are now angling together around an entity that is going to be run by an external leader to all four of their systems,” Berlin said. “With that comes the trappings of how quickly can you build? How fast can you accelerate to something that looks like a minimally viable product in market across the three different companies they said.”

There’s also potential financial implications and regulatory hurdles of nonprofit organizations operating a for-profit venture. That likely poses more of a complication than a roadblock, but it’s an added layer for the systems to contend with.

Another barrier to success could be the difficulty in building brand new solutions that will contend with companies already in the space.

“How do you get sort of the speed to value equation tackled? Not value equation relative to quality and cost, but literally the speed to creating a value proposition to where you're not just incubating it within these four health systems where it needs to work, but also the potential to contract with other health systems,” Berlin said.

The possibilities are evident and the road to them is one Longitude is willing to navigate. Time will tell if it’s a path other systems will want to follow.