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27% of Major Health Systems Intend Launch of MA; Most Lack Confidence to Succeed

ST. LOUIS – June 6, 2018 — Lumeris, the industry leader in value-based care solutions, today announced that 27 percent of major U.S. health system executives participating in a recent survey intend to launch a Medicare Advantage plan in the next four years. The survey also found that only 29 percent of those respondents planning to launch a Medicare Advantage plan felt confident in their organization’s ability to do so successfully.

“These survey findings are consistent with our conversations with healthcare executives across the country who are feeling a sense of urgency around Medicare Advantage strategies but also realize that this type of work is vastly different than traditional health system operations,” said Jeff Carroll, executive director of health plans at Lumeris.

According to the 90 surveyed executives from major sized health systems, their top reason for launching a Medicare Advantage plan is the opportunity to capture more value by controlling a greater portion of the premium dollar as compared to fee-for-service Medicare. Other key drivers cited include market and regulatory trends supporting Medicare Advantage. In particular, shrinking Medicare margins could threaten the viability of hospitals and health systems as the senior population continues to grow and becomes a larger proportion of providers’ patient panels.

Survey respondents also recognized that launching a Medicare Advantage plan will be challenging due to the complexities of operating an insurance plan which are far different than the capabilities required to successfully operate a health system. They also shared concerns about the significant financial investment required and an overall lack of expertise in the health plan space. The majority of respondents, 59 percent, indicated they were likely to utilize outside resources to launch their plans—and that those resources are very likely to include a vendor partner that can mitigate operational risk.

“Launching and managing a Medicare Advantage plan requires skills beyond the core competencies of

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