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4 reasons for providers to start insurance plans

 

Paul Keckley,  managing director of the Navigant Center for Healthcare Research and Policy Analysis,  give four reasons for providers  to start their own health-insurance plans.

But first he notes:

“The most fundamental question facing hospitals and physicians in every community is this: Given the shift in accountability for costs from insurers to hospitals and physicians, does sponsoring a health plan make sense?”

“The bottom line: Physicians, hospitals and post-acute providers are at risk for managing costs and quality. The buck stops there.”

“….Arguably, what’s needed is a financial structure through which efforts to manage the sick efficiently and maintain the health of those who are well can be coordinated. That vehicle is a provider-sponsored health plan.”

Then he gives four good reasons for providers to start health plans;

“1. Mission: Managing total population health is consistent with the role and mission of community-based health organizations. Sponsoring a plan — whether Medicaid, Medicare or commercial — affords a provider organization the mechanism whereby it is able to build and sustain continuous, ongoing relationships with individuals and households (otherwise known as patients). ”

“2. Capability: The management skills, capital, infrastructure and regulatory risk associated with sponsoring a plan can be mitigated through collaboration with  {other} successful provider-sponsored plans. There’s no shortcut to competent administration of a plan, nor is it easy. Nonetheless, it’s been done successfully by many, and their lessons, resources and professionals can be tapped.

“3. Trust: The public trusts hospitals and physicians more than insurers. That does not mean a provider -sponsored health plan can charge significantly higher premiums or offer poor service. It means the community — employers, individuals, legislators and community leaders — will respond favorably if a provider-sponsored plan is offered that’s competitive.”

“4. Timing: The private health insurance industry is at a tipping point. Its margins are at risk. Its traditional market — employers — is becoming more demanding. Its once-soaring profits are shrinking and regulators are watching. As policymakers scrutinize the insurance industry’s consolidation … and as employers seek more value for their premiums, a locally sponsored plan that’s competitive on premiums and plan design with clear alignment to the local provider community is worth discussion, especially if its financial performance is tied directly to the community’s benefit rather than insurer shareholder value.”

 


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