Medtronic (MDT) Inks Deal To Focus On Value-Based Healthcare
Zacks Investment Research | Dec 16, 2019 10:00PM ET
Medtronic plc (NYSE:MDT) recently entered into a five-year collaborative agreement with health care organization ChristianaCare for the improvement of patient outcome in Delaware and its surroundings. Financial terms of the deal have been kept under wraps.
Per Medtronic, this initiative will also reduce healthcare costs.
The Deal at a Glance
Under this five-year contract, the companies will focus on implementing value-based healthcare initiatives over fee-for-service system as according to them, value-based care is the key to achieving optimal health at accessible and affordable price.
This effort will help ChristianaCare apply appropriate medical technologies and therapies to the targeted patients. With shared financial accountability between ChristianaCare and Medtronic, this will enhance health results at lower costs.
The first initiative of this joint effort targets to address opioid-induced ventilatory impairment (OIVI). OIVI occurs when opioids used for pain management, hinder the central drive to breathe and may cause the patient to go absolute breathless unless there is any life-saving measure to redress the problem. Under this initiative, patients at high risk of OIVI will be identified and administered with continuous monitoring technology to track breathing and help alert the care team about any abnormal trends.
Other initiatives of the deal are expected to address heart failure and diabetes, two most common causes of death each year. Per the Centers for Disease Control and Prevention, these two ailments together affect more than 35 million people in the United States and burden the nation with an estimated $357 billion expense annually. The alliance aims at boosting ChristianaCare’s ability to prevent or slow down disease progression, curb frequent hospitalizations and trim overall cost of care for patients afflicted with these chronic conditions.
Is the Deal Strategic Fit?
With this collaboration, Medtronic will get access to ChristianaCare’s diverse patient population across a broad spectrum of healthcare settings and expand its customer base in Delaware and adjacent regions. This will provide an ideal testing ground for the company to develop and scale new value-based initiatives.
Price Performance
Over the past three months, shares of Medtronic have outperformed the industry it belongs to. The stock has rallied 4.7% versus the Zacks Investment Research
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