Are hospitals insuring their patients the next big thing?
That's a question that may be answered by Montefiore Medical Center, which will unveil insurance coverage to small business groups in 2015, Crain's New York Business reported. The formation of Montefiore Insurance Co. is a business decision based on the existing opportunities, said Steven Safyer, M.D., Montefiore's chief executive officer.
The Bronx-based hospital system, which currently treats one in three borough residents, already has the analytic infrastructure in place to run an insurance company, according to Crain's, which reported that it spends $100 million a year to manage risk in its caregiving ventures. It has also recently expanded, adding new facilities in Bronx-adjacent Westchester County. It is also looking to acquire a facility in Rockland County.
The decision by Montefiore to take the plunge into medical insurance would make it the third provider in New York to expand into the payer business. The North Shore-LIJ Health System introduced the CareConnect insurance company in 2013, while the upstate multispecialty practice Crystal Run Healthcare also decided to get into the insurance business.
In neighboring New Jersey, the small Hudson Holdco hospital group announced last year that it has created an insurance plan called CarePoint, which offers Medicare Advantage and Medicaid managed care plans, the latter of which has been sold on the state's health insurance exchange.
Integrated systems such as Montefiore and North Shore already have large chunks of their cost under control and can share risk, allowing them to take advantage of the fact that group payers look for provider networks that are both clinically and financially accountable, according to Crain's.
Meanwhile, many large hospital systems also believe they have the branding power to guarantee that the public would be willing to purchase insurance coverage from them directly.
To learn more:
- read the Crain's New York Business article