Health plans open community-based clinics to cut hospital costs

Focused on keeping hospital costs down for their low-income charges, many Medicaid and Medicare health insurers for the disabled are opening up community-based clinics to provide services to enrollees with chronic conditions, reports Kaiser Health News.

Bravo Health has opened up three clinics in the past year, two in Philadelphia and one in Baltimore. It stays open late and offers services not typically available in physician offices, such as IV therapies, which can cost $10,000 or more if provided by local hospitals. Other plans have also been hiring physicians to open clinics.

Bravo officials estimate that hospital costs for its populations that live near the clinics have shrunk by about 10 percent, although they say the quality of care has not degraded.

Hospital costs for Medicare and Medicaid enrollees grew at an annual rate of 7 percent between 2000 and 2009, challenging insurers who want to grow their profitability but are prohibited from raising their premiums by federal growth formulas.

"We don't have the revenue lever that commercial plans have" to keep up with those soaring costs, said Jason Feuerman, a senior executive for HealthSpring, Bravo's parent company. "They can just raise their premiums."

To learn more:
- read the Kaiser Health News article
- check out this Baltimore Business Journal piece

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