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Update on health systems being insurers



For Kaiser Health News

In addition to treating what ails you, some healthcare systems aim to sell you an insurance plan to pay for it. With some of the most competitively priced policies on the marketplaces, “provider-led” plans can be popular with consumers. But analysts say it remains to be seen how many will succeed long term as insurers.

It’s not surprising that health systems might get into the insurance business. Doing so funnels more patients to a health system’s hospitals and doctors. And it makes sense that combining clinical and claims data under one roof could lead to better coordinated, more cost-efficient patient care.

A number of well-regarded health systems have long sponsored insurance plans, including Kaiser Permanente, based in Oakland, Calif., Geisinger Health System, in central Pennsylvania, and Intermountain Healthcare, in Utah.

Yet even though healthcare systems can gain insurance know-how by partnering with or acquiring an insurer or third-party administrator to handle claims, compliance and customer service, putting it all together can be challenging.

“They’re inexperienced,” says Gunjan Khanna, a partner in the healthcare practice at McKinsey & Company who co-authored a paper on this type of plan, when talking about newer entrants in this market. “The viability of that business and the ability to manage that is a question.” [] For example, it may take years to develop the necessary skills in managing financial risk and coordinating patient care beyond the hospital or clinic, among other things.

Health plans sponsored by providers are still rare. In 2014, 13 percent of healthcare systems in the United States offered plans that covered 18 million members, or about 8 percent of all people with insurance, according to McKinsey. Most of the people covered by provider-led plans are in Medicaid managed care or Medicare Advantage plans.

A growing number of provider-led plans are available on the health-insurance marketplaces. When the marketplaces opened in 2014, there were 64 provider-led plans; next year there will be 72, according to McKinsey. In 2016, 19 percent of the new carriers on the exchanges will be provider-led plans.

The provider-led marketplace plans are priced very competitively, says John Holahan, a fellow at the Urban Institute’s Health Policy Center. In a number of rating areas, the plans will be the lowest priced at the silver level in 2016, according to a forthcoming analysis of 63 rating regions in 21 states, Holahan says. The lowest priced silver plans include those sponsored by New York’s North Shore-LIJ Health System, Oregon’s Providence Health and Services and Inova Health System in Virginia.

Inova,  based in Northern Virginia, partners with insurance giant Aetna to offer Innovation Health plans in several areas of the state. “Because of our strong relationship with Inova we’re able to buy our healthcare cheaper than most of our competitors,” which helps keep premiums down, says David Notari, CEO at Innovation Health.

An Innovation Health member who lives in Arlington, Va., and buys a marketplace plan, for example, has in-network access through Aetna’s marketplace network to all Inova hospitals, clinics and physicians and as well as other area providers.

Network coverage in provider-led plans varies. Some cover only services within the health system, while others offer broader access.

Consumers have generally been willing to accept narrower provider networks in exchange for lower premiums.

“The exchanges have pushed the concept of narrow networks front and center,” says Khanna. Consumers confronting that 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 healthcare system.”


Physicians order fewer preventive services for Medicaid patients


By Michelle Andrews, for Kaiser Health News

Gynecologists ordered fewer preventive services for women who were insured by Medicaid than for those with private coverage, a recent study found.

The study by researchers at the Urban Institute examined how office-based primary care practices provided five recommended preventive services over a five-year period. The services were clinical breast exams, pelvic exams, mammograms, Pap tests and depression screening.

The study used data from the National Ambulatory Medical Care Survey, a federal health database of services provided by physicians in office-based settings. It looked at 12,444 visits to primary-care practitioners by privately insured women and 1,519 visits by women who were covered by Medicaid between 2006 and 2010. That difference reflects  that the share of women who are privately insured is seven times larger than those on Medicaid, the researchers said. Pregnancy-related visits and visits to clinics were excluded from the analysis.

Overall, 26 percent of the visits by women with Medicaid included at least one of the five services, compared with 31 percent of the visits by privately insured women.

As for specific preventive services, the study found “strong evidence” that visits by Medicaid patients were less likely include a clinical breast exam or a Pap test, says Stacey McMorrow, a senior research associate at the Urban Institute’s Health Policy Center and the study’s lead author. The differences for depression screening weren’t statistically significant, and once patient characteristics such as age, race and home address were taken into account weren’t significant for mammograms or pelvic exams either.

For example, 20.5 percent of visits by privately insured women included a clinical breast exam, and 16.5 percent of visits included a Pap test. But the percentage of Medicaid-insured visits that included those services was only 12 percent and 9.5 percent, respectively. (The differences narrowed but remained statistically significant when adjusted for patient characteristics.)

The Medicaid-insured women were not necessarily receiving lower quality care, according to the study. They may have been receiving additional care at a community health clinic or from a nurse practitioner, for example, but the study only examined physician services provided in office-based practices.

In addition, privately insured women may have been receiving services more frequently than recommended. For example, current guidelines generally recommend a Pap test to screen for cervical cancer every three years. But if a patient asks for a Pap test every year the doctor may provide it, McMorrow says.

In addition, private insurers generally pay providers better than does Medicaid, sometimes significantly better, she says: “Where providers are getting reimbursed better, they’re going to provide services more frequently.”


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