Recent press reports have highlighted growing interest on the part of hospitals and health care systems in developing their own health insurance plans in order to bypass insurance companies and hold onto more of the health premium dollar.
Examples include Piedmont Healthcare in Atlanta and WellStar Health System in Marietta, Georgia, which earlier this year rolled out a jointly owned health plan, and MedStar Health in Washington, D.C., whose insurance was initially offered to its own 19,000 employees.1
Mount Sinai Health System in New York City—the largest health care provider in the state—will begin offering its own Medicare Advantage plan next year.2 The 16-hospital North Shore-LIJ Health System, which serves New York City and Long Island, started laying the groundwork to become an insurer in 2012.3 A survey last year by The Advisory Board Company found that 28 percent of hospitals expect to launch their own health plans within the next five years.1
The End of Insurance Companies?
The Fiscal Times and The Washington Post have reported that hospitals are plotting “the end of insurance companies” by trying to cut these middlemen out of the equation.1,2 However, experts say the trend of hospitals developing their own health plans is part of a larger movement toward integrated health care delivery, which includes medical homes, accountable care organizations (ACOs), and shared financial risk between insurers and providers for managing the health care needs of populations as physician and hospital reimbursement models transition from fee-for-service to bundled payments.
Typically, hospital-based health insurance plans are launched by larger multiple-hospital systems with regional coverage, often through partnering with an experienced insurer to create a hospital-branded product. They also require coordination with medical groups, particularly the all-important primary care providers, and better communication among physicians, ideally through compatible electronic health records, said Shantanu Nundy, MD, MBA, managing director of clinical innovation for Evolent Health in Arlington, Virginia. Evolent Health partners with health systems to transform how they deliver care, which may involve building health insurance plans.
“There’s definitely a trend for provider systems to assume more risk for patients’ health,” Dr. Nundy said. “The ways they do that vary along a spectrum, but this trend definitely includes provider systems themselves becoming insurers, putting together health plans, [and] using ACOs or contracting with ACOs to take on risk for population health.”
From Challenge, Opportunity for Emergency Medicine
As shared risk and bundled payment become a larger share of hospital reimbursement, frontline providers, such as emergency physicians and hospitalists, will face increased pressure from their health systems to provide high-quality, highly efficient care because their systems will be financially at risk for the care of the populations they serve, Dr. Nundy said. “But it also means doctors get to do the job we were trained to do—seeing only those patients who require our particular expertise,” he said. “It means putting emergency back in emergency [departments], with patient-centered, efficient, coordinated, quality care.”