Provider-led health plans continue to lose money, but growth opportunities exist

The number of provider-led health plans and enrollees in those plans is growing, but close to half of 89 provider-led plans lost money over a three-year period, according to a new report from McKinsey & Co.

Losses grew steadily even as plans expanded into new lines of business, with the exception of large-group markets, according to the report. The two segments with the largest growth were managed Medicaid and the individual market, where 29 percent of provider-led plans made money in 2014 and the number of plans offering the lowest-priced silver plan rose from 15 percent in 2014 to 26 percent in 2016.

Consumers reported interest in care that is more coordinated and integrated, McKinsey reported, providing opportunities for health systems considering or already offering health plans.

"Success will require them to have--or develop--a range of skills," according to the report. They include the ability to:

  • Design products that meet consumers' needs
  • Use sophisticated data analysis to develop better pricing structures
  • Use integrated claims and clinical data to improve medical management

Overall, 15.3 million people in 43 states were enrolled in provider-led health plans in 2014, up from 12.4 million in 2010. The new report follows up on an initial McKinsey report released in January 2015.

To learn more:
- here's the full report (membership required)

Suggested Articles

Hospital system second quarter earnings illustrated just how pivotal a $175 billion provider relief fund was to offsetting major COVID-19 loss

Medicare Part D plans largely design their formularies to encourage use of generics, despite some criticism to the contrary, a new study shows.

Federal health officials released a proposed rule late Monday for 2021 Medicare payment rates and changes to the Merit-based Incentive Payment System.