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Hospitals Mull Medicare Advantage Opportunities

Margaret Dick Tocknell, for HealthLeaders Media, June 26, 2013

Almost all the growth in Medicare in recent years has been accrued to Medicare Advantage. Now health systems and hospitals are considering collaborating with an insurer or developing their own Medicare Advantage plans.

"If [insurers] want to get on the dance floor, now is the time to do it," stated Paul Mango, a director at McKinsey & Co.

Speaking at a packed session at the annual conference of America's Health Insurance Plans, in Las Vegas earlier this month, Mango outlined how competing market dynamics are transforming the healthcare industry and how those influences may affect health plans.

His acknowledgement that hospitals and health systems, are looking at becoming insurers—most likely in the Medicare Advantage market—resonated well with the AHIP crowd.

Mango pointed to several factors, including simple economics, that are sparking provider interest in taking on an insurer role in the Medicare Advantage market.

With an emphasis now on care coordination and the continuum of care, the healthcare delivery system is shifting from hospitals to physician offices and outpatient facilities. Hospital executives understand that the return on investment on future bed towers will not be positive.

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