PROJECT SUMMARY
Winning in community cardiology today means delivering more value through higher quality and lower costs than the competitor. In other words, it means change – specifically, structural change. The organizational structure of independent private practice is incongruent with the market need for achieving synergistic growth and profitable risk contracting. Current payment and care delivery models require a scalable organizational model, a reliable administrative infrastructure, and an agile care management platform. The solution: align the organizational structure to market need.
A near-term core market opportunity of $26-50M in annual net medical revenue under management exists to leverage the management services organization (“MSO”) model to connect, unify, and grow the business of 31-60 community cardiologists. While the MSO model itself is not new, its ability to meet the core market need is undeniable, making it the essential model for winning in value-based care. The long-term market opportunity, including the statewide growth market, is estimated at $54-98M in annual net medical revenue under management.
Twenty-one (21) or more cardiologists in the core market will come together to form a limited liability company called Valuspan, a cardiology-specific MSO. Valuspan will be initially capitalized with $350k in long-term debt and $5k per cardiologist in member contributions to fund tenant improvements on space, acquire furnishings and equipment, pay for organizational costs, and provide short-term working capital to begin providing management services to the clinical practices of the cardiologists under a management services agreement. Valuspan will achieve profitability in its second year of operations and will grow beyond breakeven in its third year of operations to 31 cardiologists and $28M in net medical revenue under management by aligning core market community cardiologists. Statewide long-term growth is planned beyond the fifth year of Valuspan’s operation.
