1 in 5 Health Systems to Become Payers by 2018

Margaret Dick Tocknell, August 20, 2013

Cost and reimbursement pressures, the explosion of boomers in the hospital patient mix, and the movement toward population health are spurring health systems to launch their own health insurance plans.

Health systems are increasingly taking on new roles and becoming health insurers. Spurred by healthcare reform, the creation of health insurance exchanges, and a shift to population health, health systems are assessing the opportunities of becoming a payer against the risk of taking that step in the ever evolving healthcare industry.

A growing number of health systems are deciding that it is worth the risk. In a June survey of more than 100 hospitals and health system across the country, 34% responded that they already own health plans. Another 21% said they plan to launch a health insurance plan by 2018, according to the Advisory Board Co., a Washington, D.C.-based research and consulting firm.

Among the health systems launching health plans:

  • Boston-based Tufts Medical Center and its physician group, as well as Vanguard Health System received regulatory approval this week to launch Minuteman Health, which will be offered on the Massachusetts health exchange, the Commonwealth Connector.
  • Catholic Health Partners, a Cincinnati-based health system, will launch an insurance plan on the Ohio HIX on Oct. 1.
  • North Shore-Long Island Jewish Health System, a Long-Island, NY-based hospital system has received state approval to offer its health plan called CareConnect on the state health insurance exchange beginning Oct. 1.
  • Piedmont Healthcare and WellStar Health System, two powerful Atlanta-based health systems, are developing a health plan that will offer commercial and Medicare Advantage products in 2014.
Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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