Hitting the Landing Zone

John Commins, October 1, 2016

Robert A. Marino, chairman and CEO of Horizon Blue Cross Blue Shield of New Jersey, says payers are simply adapting to the new market created by the ACA's push for population health, and the consequent consolidation of provider networks. While leverage was once a key motivator for providers and payers, Marino says other factors are coming to the fore.

"If you were to ask me three years ago, I would have said the main motivator for provider consolidation is market share and leverage with payers," he says. "But, over the past three years as this value-based movement has gained traction, there are hospitals and health systems out there that are trying to consolidate to create greater value in terms of acquiring a full continuum of healthcare access for inpatients/outpatients, doctors' offices, and freestanding facilities, as well as positioning themselves to be able to move toward value-based payments.

"Many of these systems that have consolidated in New Jersey are working with us to move toward population management with the ultimate goal of accepting risk for managing a population of patients and keeping them healthy," he says. "The proof for me as I see hospital consolidations in our market has been the fact that those systems that have consolidated are truly motivated toward moving to a value-based system."

In fall 2015, Horizon launched a preferred provider network in New Jersey called OMNIA Health Alliance that includes six of the largest hospital systems and one large multispecialty practice group.

"It's an innovative approach that changes the historical relationship between the payer and provider from one that was based on an annual fight over rates, to a longer-term view of how do we move this system toward a value-based system in which the focus will be on population management, keeping patients well, keeping patients out of the hospital, engaging the patients in their care, engaging them in preventive care, and lastly the ability of all of that to lower the total cost of care," Marino says. "Another aspect of what we believe is very innovative about this partnership is that over a period of time these providers will actually assume financial risk for the well-being of their populations that are assigned to them."

For OMNIA's partner providers, Marino says Horizon provides a pathway to full capitated risk that begins with shared savings, transitions to risk corridors after two years, and then transitions to full global capitated risk several years after that.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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