Why Provider-Sponsored Health Plans are Gaining Ground
Collaborating with other professionals and institutions who have run successful provider-sponsored health plans can offer key guidance for your organization.
By - There are a number of reasons why provider-sponsored health plans are growing and more hospitals are considering investing in their own health plans instead of partnering with health payers, says Paul Keckley, Ph.D., a healthcare industry expert who manages The Keckley Report, in a column for Hospitals & Health Networks.
First, while the growth rate of healthcare costs has diminished, an annual 5 percent rise in healthcare spending is still expected over the next decade, which means that payers and employers are likely to bring more strain among providers to reduce the costs of their services. However, provider-sponsored health plans are likely to align more closely with the actual prices set by hospitals, clinics and laboratories.
Additionally, there has been a significant change in the healthcare industry since the Affordable Care Act was established. There is much more incentive than before to transition away from fee-for-service payment platforms to value-based care reimbursement.
Providers are gearing up for reimbursement based on quality and value of medical care instead of volume of services. With more providers gearing up for working within accountable care organizations or bundled payment models, it makes more sense to invest in provider-sponsored health plans, which will manage costs of these value-based care initiatives.
How can healthcare providers offer a successful hospital-sponsored health plan? First, it is important for hospitals and health systems to collaborate with other major institutions offering provider-sponsored health plans to better understand the way to manage and build this type of health insurance program.
For instance, tapping into the knowledge of other professionals can give more perspective on the risks associated with provider-sponsored health plans and how to overcome any challenges, says Keckley in his column.
With the health insurance industry changing drastically due to regulatory interventions and premium costs rising on a yearly basis, hospitals and health systems may be in the midst of an opportunity to sponsor their own health plan in order to benefit the community they serve. The key mission of provider-sponsored health plans should be to ensure affordable prices for the patient community while strengthening the quality of care.
The Navigant Healthcare Pulse 2013 reported on the opportunities afforded by provider-sponsored health plans as well, describing how these forms of coverage could enable individual consumers to buy health insurance instead of having employers choose particular health plans for their employees.
There are a number of reasons why hospitals and health systems have pursued their own health plans including improving population health and wellness, increasing the market it serves, and creating more staying-power among its physician base.
Both in 2007 and 2011, 13 percent of community hospitals around the country have reported holding an equity position within an HMO plan. The future shows that more provider-sponsored health plans are in development including Partners HealthCare System, Vanguard’s Detroit Medical Center, and Sutter Health.
The future for the health insurance industry may transition toward provider-sponsored health plans and essentially depends upon creating more trust among providers and the community it serves.
“I believe 20 years from now, the centerpiece of health care in every community will be an integrated system of health that features a set of retail and inpatient facilities and service centers, a clinical network of physicians and allied health professionals connected to each other and to their patients, and a health plan through which its services are accessed and transactions managed,” Keckley wrote.
“I am sure Aetna, Anthem, United and the Blues will still be in business, perhaps supporting provider sponsored plans along with their other endeavors. And I am confident consumers, employers and other purchasers will reward provider-sponsored plans that perform well and punish those that don’t."
Dig Deeper:
1.5M Workers Gained Employer-Sponsored Healthcare Coverage
Why HEDIS Quality Measures Matter for Value-Based Care
