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North Shore-LIJ Health System to Launch a Health Plan

 |  By John Commins  
   August 01, 2013

CareConnect, the first provider-owned commercial health plan in New York, will offer lower prices and gives the healthcare provider "serious control" over quality and care coordination, says an NS-LIJHS executive.

North Shore-LIJ Health System has been granted a license by New York to launch the first provider-owned commercial health insurance plan on the state's health insurance exchange.

When enrollment begins on Oct. 1, members of the new North Shore-LIJ CareConnect, will have several plans to choose from. When the plan takes effect on Jan. 1, 2014, members will have access to one of the state's largest integrated healthcare systems, which includes 15 hospitals and ambulatory services at more than 400 physician and ambulatory practices in Long Island, Queens, Staten Island and Manhattan.

"As the first provider-owned health plan in New York, North Shore-LIJ CareConnect will be able to deliver a simple, total solution for individuals, families and businesses looking to access both high-quality medical care as well as more-affordable insurance coverage," North Shore-LIJ President/CEO Michael J. Dowling said in a media release.


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"During an era when healthcare is becoming increasingly confusing, we're simplifying the process and transforming the way we connect with and serve our customers. In addition, taking risk for a population in this manner will significantly add to our capabilities to work productively and creatively with other third party insurance company partners."

Howard B. Gold, North Shore-LIJ's executive vice president of managed care and business development, told HealthLeaders Media that ConnectCare hopes to enroll between 10,000 and 15,000 lives in its first year of operation and offer a line of plans that are significantly less expensive than those of their competitors.

"The difference with us is that we are limiting the network to our providers where we have some serious control over quality and coordination. We can make it a much simpler process to get into care and get coordinated care among the various providers," Gold says.

"We are also setting the price lower than almost any other plan out there in the commercial marketplace now or even projected to be on the exchange. We are going to be about 10% or more lower than the Oxford Liberty plan which is the lowest in the market. The numbers we have seen right now [show] we are about $420 for an individual on the exchange this October on the silver plan. That is what has been approved so it is public. We have also seen that Aetna is about $600 for the silver plan on Long Island. United's plan that is out there is going to be about 30% higher than us."

Gold says CareConnect gives North Shore-LIJ the opportunity "to improve our ability to coordinate the care not just for this product but for anyone who comes into our health system. We are using this as a way to transform the model of care from fee-for-service to one where there are alternative arrangements for reimbursements. It has a major effect on the way you deliver care for everyone."

Healthcare economist Adam Powell says CareConnect is part of a growing trend towards payer-provider integration.

"We have recently witnessed the acquisition of West Penn Allegheny Health System by Highmark and the acquisition of Neighborhood Health Plan by Partners HealthCare," he says.

"As has long been demonstrated by Kaiser Permanente, when the delivery and financing of healthcare are integrated it is possible to offer high-value, innovative services that are otherwise less feasible. Integrated delivery systems are able to invest in services that improve quality and lower costs, but may not be billable using conventional fee-for-service means. As the insurer arm of an integrated delivery system can capture the savings from unbillable provider services the services can be financially justified."

Powell, president of Boston-based consultants Payer+Provider Inc., says that North Shore-LIJ can use CareConnect to increase the size of its patient population.

"Patients covered by the health plan are steered towards North Shore-LIJ providers," he says. "As the health system works toward treating more patients under value-based payment arrangements it has invested in developing the capabilities necessary to manage risk and keep patients out of the hospital. By running a health plan, North Shore-LIJ increases its ability to financially benefit from the risk management capabilities that it already must develop."

Alan Murray, vice president of managed care at North Shore-LIJ says CareConnect "signals a different way for health insurers and providers to work together."

"I also think it signals a different way to design products and for doctors, hospitals and insurers to design their plans so that services are coordinated better and that the highest quality providers rise to the top," he says.

"Those providers who are not involved in these kinds of activities or those insurers who are not involved with providers who are willing to be in these kinds of activities will fall by the wayside. Plans that do this, whether it is a provider that owns the plan or a plan that wants to work with providers like us, are the ones that are going to succeed and be very successful under the Affordable Care Act."

Gold says he does not anticipate that CareConnect will create friction with established health plans that now do business with North Shore-LIJ.

"We will work and need to work with every payer and every carrier," he says. "I am anticipating that this will improve it because it gives us the capability to work with them in a way we haven't had before. If I can manage the care of my own employees and the members who join our plan, we can help manage their care better too. And if we can manage their care better too, they have the opportunity to share risk and premium and coordination and to sell products with us. We have done that in a number of cases already with the full knowledge of the plans that we are going to go out into this market. We didn't hide from anyone that we're trying to do this."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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