Pricing power is at the heart of Philadelphia’s healthcare battles in 2021 as providers seek to recover from massive financial losses due to the pandemic and payers move ahead with far more enviable financial security. While some studies show that health system consolidation leads to higher prices, the results are not universal and can vary significantly by market. In Philadelphia, where Independence Blue Cross has 45 percent of the insurance market, even large integrated delivery networks cannot afford to be out of the insurer’s network. Jefferson Health is poised to acquire Einstein Healthcare even after the Federal Trade Commission argued the merger would give the IDN greater bargaining power over insurers, including IBC. In contrast, Penn Medicine aligns even more closely with IBC to maintain favorable reimbursement. Smaller IDNs face the most uncertainty after COVID-19 related losses, with Tower Health forced to sell assets. Not all small systems are in trouble; a turnaround strategy at Temple Health shows paths forward, especially for providers who embrace supply chain consolidation and effective population health strategies. Major IDNs have affiliations with important midsize health systems, giving them geographic diversity and valuable patient referrals. Oncology remains a significant revenue generator, with innovation coming from the market’s three cancer centers. Efforts to address opioid use disorder have ramped up due to state funding, and more primary-care practices are incorporating behavioral health as a result. As an innovative market, Philadelphia providers offer several digital tools that enhance imaging or make community services easier to access. Look for the market to increase healthcare access for low-income communities to improve outcomes for chronic diseases and ensure better COVID-19 care and vaccine distribution.

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