Future of Provider-Sponsored Health Plans and Managing Risk

By Cathy Eddy, Health Plan Alliance, December 1, 2014

Deloitte Consulting conducts an enterprise wide risk assessment with Presbyterian Health Services annually and the information is leveraged by the health plan.

Health systems are looking at their range of options for the future – most with an eye for making the transition from fee-for-service to value-based reimbursement. These options include shared savings programs, bundled payments, accountable care organizations, some form of capitation or global payment and for some, starting or growing a health plan. These options involve varying levels of risk.

As the lines blur between payers and providers, it is important for health systems to carefully evaluate their strategies and their partners to be successful in the future. It will also mean doing business differently and navigating through the major challenges that have been driven by marketplace dynamics and health care reform.

Many organizations have identified provider-sponsored plans as a “hot topic” and are trying to identify the keys to success with this model. As systems move to value-based reimbursement, a health plan can act as both a catalyst and an accelerator for change.

For almost 20 years, the Health Plan Alliance has been working with integrated delivery systems that have health plans. These are the systems that stayed with the vertical strategy when many of their colleagues sold off or closed down their insurance arms. The health systems that stayed committed to owning a health plan are now at a strategic advantage in many ways:

• They have a vehicle to understand and manages risk
• Health plans have the infrastructure to manage populations 
• A closer link to the marketplace 
• Better understanding of managing care 
• Ability to gather and analyze quality data for the populations served 
  
• A driver for more clinical integration 
  

What are some of the key considerations for systems to consider when owning a health plan or partnering with one?

• What are the populations you want to serve – commercials, exchanges, Medicaid Advantage, Medicaid or duals? These all have different risk challenges 
  
• Do you have the financial resources to fund a start-up and maintain the risk-based capital requirements? 
  
• Do you have or can you acquire the expertise to run a successful plan? 
  
• Does it make sense to partner with another health plan or payer?
  
• Are you willing to make the delivery system changes need to manage risk? 
  
• Are your physicians organized to take on risk and support quality measures of a health plan? 
  
• Are you organized to manage the care of a population along the healthcare continuum?
  
• Are you thinking about direct contracting with large employers in your marketplace?

The members of the Health Plan Alliance have a wealth of knowledge about how integrated delivery systems are managing risk. Last month, our Fall Retreat addressed the various levels of risk that a health plan manages – governance, product lines, physician alignment, clinical integration, financial and business continuity.

If you weren’t able to attend this meeting, you can find the presentations on our website and you can request a video recording of the meeting.  Managing multiple levels of risk will continue to be a challenge for health systems in the future, especially those that have made the strategic investment to own a health plan.