Came for hospital equipment supplies, stayed for insurance
You may come to a healthcare facility to make use of its hospital equipment supplies – e.g., a blood pressure monitor to keep track of your hypertension – and leave with a new insurance plan. More and more healthcare systems are becoming hospitals-cum-insurers in an attempt to turn patients into customers. Healthcare providers offer some of the most competitively priced policies on health insurance marketplaces, but only time will sort out the Jordan Belforts from the Willie Lohmans. The incentives to throw their hats into the ring are there, though; funneling more patients to a health system's hospitals and doctors, and combining clinical and claims data in a single place could result in better coordinated and more cost-efficient patient care.
Several established health systems such as Kaiser Permanente, Geisinger Health System, and Intermountain Healthcare are by no means new to sponsoring insurance plans, and newcomers can learn a lot by partnering with or acquiring an insurer or third-party administrator to handle claims. However, organizing the whole thing is no piece of cake, either. “They're inexperienced,” partner in the health care practice at McKinsey & Co. and co-author of Provider-led health plans: The next frontier—or the 1990s all over again? says. “The viability of that business and the ability to manage that is a question.” After all, you don’t acquire the skills to manage financial risk and coordinate patient care overnight.
Provider-sponsored healthcare plans remain the exception rather than the norm. Last year, 13% of healthcare systems in the U.S. offered plans covering 18 million members – or approximately 8% of all insured people, according to McKinsey. The majority of people covered by provider-led plans are in Medicaid managed care or Medicare Advantage plans. However, the number of provider-sponsored plans is ever growing. There were 64 such plans when the marketplaces were launched in 2014. McKinsey estimates there will be 72 in 2016, by which time provider-led plans will represent 19% of the new carriers on the exchanges.
Urban Institute's Health Policy Center fellow John Holahan says that provider-led marketplace plans are very competitively priced. An upcoming analysis of 63 rating regions in 21 states predicts that the plans will be the lowest-priced at the silver level in 2016 in a number of these areas. New York's North Shore-LIJ Health System, Oregon's Providence Health and Services and Inova Health System in Virginia will sponsor the lowest-priced silver plans. Some of the plans only cover services within the health system that offers them, but others provide wider access. Users tend to be more accepting of the latter as long as they get lower premiums. “The exchanges have pushed the concept of narrow networks front and center,” says Khanna. Consumers might want to “consider a provider health plan, because it's based around a network of providers and at heart a network is built around a health care system.”