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PA Hospitals Mull Health Plan Launch

 |  By Margaret@example.com  
   July 31, 2013

A trio of health systems say they will jointly manage the healthcare benefit plans for an estimated 32,000 employees and dependents. "This is a starting point," says one CEO.

Three independent Philadelphia-area health systems are forming an initiative that could lead to the development of a new health plan. The move reflects the changing healthcare landscape where the ability to scale will be critical, value will trump volume in patient care, and providers will be expected to be more engaged in risk taking.

The initiative, which was 18 months in the making, is one of the first of its kind in the Philadelphia region, although a similar organization has been formed in Georgia where 23 hospitals announced last week that they had formed an alliance.


See Also: North Shore-LIJ Health System to Launch a Health Plan


"We believe we need to be positioned to take risk by creating the infrastructure and access points that will enable us to enroll larger populations than any of us do now," says Barry R. Freedman, president and CEO of Einstein Healthcare Network, an integrated delivery network that is part of the initiative.

Along with Einstein, Abington Health and Aria Health will work together initially to jointly manage the healthcare benefit plans for an estimated 32,000 employees and dependents. That effort, which will include a common information system, is expected to be up and running by July 2014.

The trio, which includes 10 hospitals and 2,500 beds, currently operate individual self-funded healthcare benefit plans and use a variety of third party administrators to manage the plans. The joint venture is expected to centralize that function into a single TPA, according to Freedman.

The group hopes to develop capabilities, including information systems and support, to grow the initiative, he says. Other providers could participate on an equity basis. The initiative could also permit other companies and populations to access its provider network "through some vehicle" as subscribers.

The group plans to look at a variety of payment plans that could appeal to larger populations, including bundling, shared savings, and accountable care organizations. Freedman says the group is also open to partnering with an insurer to develop products.

Combining their efforts will provide Einstein, Abington Health, and Aria Health with the scale needed to develop the infrastructure to support population health and improve healthcare delivery, including care coordination and inpatient and outpatient care transitions. "None of us are able to do this on a comprehensive basis today," says Freedman.

The financial investment is unknown, although each system will invest equally. "It depends on what we do," says Freedman. "If we decide to have an insurance company with full commercial, Medicaid, and Medicare Advantage plans, that’s one number. If we do shared savings, that’s an entirely different number."

Put simply: The group is in the process of assessing its opportunities. "This is a starting point," Freedman says.

Work groups directed by C-suite representatives from all three health systems have been formed, with each system focusing on one area. Aria Health is focused on business planning, Einstein Health Network is looking at human resources, and Abington Health is tackling the technological infrastructure for the initiative.

The three are in the process of forming an LLC to oversee the initiative, which will have a governing board of an equal number of representatives from each health system. An executive team will be recruited to oversee the LLC.

Freedman says there are no merger plans for the three health systems.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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