Will healthcare see more provider-payers?

To survive the industry shift to a payment system that rewards value over volumes, some hospitals are turning into provider-payers that offer health plans, according to three hospital executives at the Hospital of Tomorrow forum by U.S. News & World Report.

For Inova Fairfax Hospital in Northern Virginia, its move into insurance market involved partnering with Aetna, U.S. News reported. Inova coupled excellent patient care delivery with Aetna's brand recognition and market growth potential, Chief Medical Officer John Moynihan said Tuesday during the panel discussion.

California's Sutter Health took a more aggressive approach, starting its own HMO business, a costly venture that forced it to limit other capital initiatives, Becker's Hospital Review reported. In fact, Stephen Nolte, CEO of Sutter's new health plan, said developing an insurance arm will cost hospitals at least $50 million.  

"Finding the right resources is very difficult. It's a very limited commodity for the right people and systems," Nolte said at the panel.

UPMC (University of Pittsburgh Medical Center) has been operating a health plan for more than 15 years, largely to compete against Highmark, according to UPMC's Chief Medical and Science Officer Steven Shapiro. He also credited the provider-payer approach with UPMC better understanding healthcare costs--an attribute that appeals to increasingly price-sensitive consumers, Becker's noted.

Insurers continue to see new competition from providers that are launching their own health plans, including MedStar Health, the largest health system in the Baltimore-Washington, D.C., area. The provider's latest health plan offering, MedStar Select, began coverage earlier this year and already has 11 percent of its 30,000 employees signed up, Eric R. Wagner, MedStar's executive vice president of external affairs, told FierceHealthPayer in an interview last month.

But Wagner maintained MedStar isn't trying to compete head on with insurers, but rather trying to put more focus on population health management and value.

"I think we need the payers. We need CareFirst, United and Aetna. As far into the future as I can see, I cannot see a time where that's not a true statement," Wanger said. "And I likewise believe that they need MedStar and what we bring. So we all just need to figure out how to work together better and more effectively to allow transformation to happen."

For more:
- here's the U.S. News article
- read the Becker's article

Suggested Articles

Humana is launching new initiatives aimed at easing the administrative burden on providers as they treat patients with COVID-19. 

Physician practices across the country worry if they can survive the cash crunch caused by the coronavirus pandemic.

Microsoft is warning hospitals that sophisticated ransomware attacks are trying to exploit remote workers to gain access to their networks.