Count Philadelphia among the major U.S. markets favoring bundled payment models over ACOs to manage healthcare cost trends. Led by Independence Blue Cross’ march toward long-term, value-based contracts with significant providers, Philadelphia’s providers are experimenting with both Medicare and commercial bundled payments. The market’s integrated delivery networks incorporate technology and cultural change tools to find success with these new models, while diversifying their business with new drugs and medical devices to bring in new revenues. Jefferson Health and Penn Medicine continue to grow, emphasizing high-cost specialties, such as oncology, and outpatient access. The major IDNs have affiliations with important midsize health systems, giving them geographic diversity and valuable patient referrals. Oncology remains a significant revenue generator. Expect risk-based payments to further shape competition in Philadelphia, as health systems continue to consolidate and develop new service lines and insurers compete with IDNs to acquire provider groups to manage patient care and costs.

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