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

A select few legacy health organizations could thrive under a ‘Medicare for All’ system, according to a new analysis. 

The Congressional Budget Office estimates a Senate package tackling surprise billing and drug prices will save the government $7 billion.

Mahmee, a startup focused on maternal and infant health, just closed a $3 million funding round that includes Mark Cuban and Serena Williams.