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Happy Thursday, Health Technicians!

🙏 Many thanks to the hundreds of you which was released yesterday at Axios BFD, and to the tens of thousands who watched virtually. If you missed it: Watch the Axios BFD interviews.

1 big thing: Expert Voices sees a new exit strategy

The BFD Health Tech Expert Voices Roundtable. Photo: Beatrice Moritz

The next frontier value-based care can be in specialist care, healthcare negotiators told Axios BFD.

Why is it important: As value-based care frameworks expand out of primary care, a myriad of sponsor-backed specialty physician companies can now have a new exit thesis, Axios’ Claire Rychlewski writes.

What they say : “Primary care companies are getting big enough, with enough lives to say, ‘Let’s start bringing these specialties in-house,'” VillageMD CFO Ross Levine said yesterday at the BFD Health Tech Expert Voices roundtable. .

  • “We’re starting to see value-based care in specialty areas,” said Ravi Sachdev, partner at Clayton Dubilier & Rice, who sits on Agilon’s board.
  • Sachdev and others cited oncology and musculoskeletal care as logical specialty areas for risk management arrangements.

Between the lines: There’s a science to getting it right, said Arsenal Capital investment partner John DiGiovanni, drawing a comparison to private equity’s PPM stacking thesis.

  • “There’s a ‘J’ curve, and that’s why there’s some resistance to specialty areas,” DiGiovanni said. “The savings are there, once the incentives are right.”

Yes, but: Not all specialties are ripe for inclusion in a VBC framework.

  • “No one here is talking about doing values-based child psychiatry [for instance]“said Griffin Myers, chief medical officer of Oak Street Health.
  • “Capturing value requires creating value, so we need to determine the loser on that side of the trade,” he said.

Meanwhile, Healthcare executives aren’t sweating the Amazon effect, even after the e-commerce giant’s $4 billion bet on primary care player One Medical this year.

  • “Amazon is bringing in capital and technology, but they’re not bringing in what’s needed — doctors or patients,” said Rubén José King-Shaw, chief strategy officer at Steward Health Care.

The plot: The disruption to Amazon primary care will create some price incongruity, Arsenal’s DiGiovanni has warned.

  • “We are entering a recession,” he said. “It’s going to affect the pricing of small trades, and you may see some erosion and potential for arbitrage at the lower end.”