Some hospital networks also become insurers

Michael Dowling, who runs one of New York's largest hospital networks, is preparing to turn his business model on its head: He wants to keep his hospital beds empty, rather than full. That's because the North Shore-LIJ Health System, with 16 hospitals and more than 300 outpatient centers in Long Island and New York City, is laying the groundwork to be an insurer, as well as a provider of health care. Like other hospital chains across the country, it’s under intense pressure from public and private insurers, as well as employers, to accept flat-rate payments for care, rather than reimbursements for every service. And that puts pressure on hospitals not just to manage costs, but to keep people well—in short, to act more like insurers.