"There's an economic piece to this that is really creating urgency to change the way organizations care for patients and ultimately [change] the way they are paid," says Frank Williams, CEO of Evolent Health, an Arlington, VA-based firm that helps hospitals and health systems work through the pros and cons of becoming a provider-payer.
Evolent is working with 15 health systems and several of them are looking at creating their own health plan. As primary drivers of the trend, Williams cites cost and reimbursement pressures, the explosion of boomers in the hospital patient mix, and the movement toward population health.
He says with the focus on population health hospitals and health systems now have a much broader view of their place in the healthcare delivery system. They look beyond their own walls to their affiliated physicians, as well as their outpatient and home health resources. They are exploring how to bring these entities together in a more seamless way to deliver a better product to the market in terms of cost and quality.
"Once you begin to move in that direction, how do you get paid? Health systems are stepping back and asking how [they] can get paid effectively to get a return from this effort," says Williams. "Some are deciding that it makes sense to offer their own product to the market."
He says most providers taking this step are not looking to "sign on General Electric and cover their employees worldwide." Small employer groups are particularly appealing because their coverage decisions are based on the local healthcare network where their employees get most of their care.