Four large nonprofit health systems created a new company to use as a testing ground for faster drug development, improved care coordination for Medicare Advantage patients and streamlined billing processes. Baylor Scott & White Health, Memorial Hermann Health System, Novant Health and Providence are the founding members of Longitude Health. Each health system has made an undisclosed financial commitment to fund Longitude, which is a Delaware-based holding company owned and managed by its founders.
The health system-led, for-profit entity plans to form three operating companies that will essentially act as startups on pharmaceutical development, care coordination and billing. Chief executive officers of the participating systems make up the Longitude board, along with Longitude CEO Paul Mango, former chief of staff at the Centers for Medicare and Medicaid Services. Executives hope to create additional operating companies and attract more health systems and investors over the next year.
“Health systems have a lot of constraints within their organizations, so we created an environment where they could contribute financially and intellectually to creating a new business that moves quickly, hire new talent and act as a startup,” Mango said.
Dr. Rod Hochman, president and CEO of Providence, pointed to health system-led ventures, including generic drug company Civica and data analytics firm Truveta, as models Longitude can build on. “Together, we can work more efficiently on each of these issues than we could as one-off projects,” said Hochman, who plans to retire at the end of the year but will remain on Longitude’s board. “If we develop something that has a lot of value in healthcare, like Civica, we don’t want it to be exclusively for us. We want to share it across the industry.”
The participating health systems — Baylor Scott & White in Dallas, Memorial Hermann in Houston, Novant in Winston-Salem, North Carolina, and Providence in Renton, Washington — whittled down about 40 different ideas for Longitude’s initial companies to three, Mango said.
One will focus on the development of complex drugs, such as monoclonal antibodies used to treat cancers and infectious diseases. The health systems plan to use their collective resources to quickly demonstrate a drug’s effectiveness, Mango said.
Another Longitude company will focus on care coordination. Medicare Advantage plans have asked Longitude founders to work closely with physicians to limit readmissions. The company aims to help health systems hone treatment and improve care transitions, executives said.
The third company is designed to boost the patient experience by consolidating medical bills into one invoice that shows exactly what a patient owes, Mango said.
The founding health systems plan to invest in the operating companies, and others, over the next five years, executives said.
Longitude is named after a 1714 contest where the British government offered 20,000 pounds to anyone who could figure out how to calculate longitude within a half degree.
In January, Longitude plans to convene a competition among the participating health systems on Longitude’s next focus, which may be related to health IT, cybersecurity, labor productivity or value-based care.
“The sky is the limit,” Hochman said.