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Owning a Health Plan is Not Enough

Analysis  |  By Rene Letourneau  
   March 09, 2016

Unless senior leaders encourage a culture of cooperation, provider-owned health plans will have a relationship with the provider network that is just as acrimonious as that of any outside payer, says SelectHealth's CEO.

As the healthcare industry continues its steady march toward population health management models, health systems that own and operate a health plan may be at an advantage.

That's the message I've heard from senior leaders from some of the largest healthcare organizations around the country. Provider organizations that also have an insurance entity already own the risk for the health of their members and can benefit financially by reducing the overall cost of care.

Population health programs that are designed to provide more preventive services and assist patients with successfully managing chronic conditions ultimately result in lower revenue for health systems that still function in a primarily fee-for-service environment.

Organizations that also consist of a health plan, however, can commit to value-based reimbursement models that essentially move the money from right pocket to left pocket because what the provider side no longer generates in revenue, the payer side now saves in member claims.

Culture is Critical to Success                                                   
Yet, simply having a health plan as part of the organization is not enough to ensure financial success, says Patricia R. Richards, president and chief executive officer at SelectHealth, the insurance arm of Intermountain Healthcare based in Salt Lake City, UT.

Unless senior leaders encourage a culture of cooperation, provider-owned health plans will have a relationship with the provider network that is just as acrimonious as that of any outside payer and will not be as successful as possible in improving care and reducing costs, Richards says.

"By having an organization that is integrated and actually owns a health plan, it really sets the foundation for being able to have a single system that integrates the clinical work and the financing of healthcare. Having said that, though, it creates a foundation where it is possible to have collaboration. I've seen organizations where they have ownership, but they are just as adversarial as ever," she says.

Leaders need to make it a priority to create a culture based on communication, collaboration, and a focus on the organization's mission in order to yield the best clinical and financial results, Richards says.

"It helps if you are part of the same organization that has ownership of both sides, but it is more important that top leaders foster that culture. It is also very important that the governing board plays a role and sets the expectation that we are all in it together to work for the benefit of the community," she says.

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Rene Letourneau is a contributing writer at HealthLeaders Media.


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