In today's volatile payer landscape, introducing or expanding a provider-sponsored health plan can be a powerful way to stave off skirmishes and improve care for your community. But it's "not for the faint of heart," says one CFO in the know.
Aside from staving off skirmishes with external payers, proponents say it's a way to boost care quality, integration, and affordability for their communities.
But that doesn't mean it's easy going.
"It is not for the faint of heart," says Robin Damschroder, MHSA, FACHE, executive vice president and chief financial and business development officer at Henry Ford Health (HFH), which has more than 250 care locations, including five acute care hospitals; more than 33,000 team members; and upward of 650,000 covered lives throughout Michigan. "You do have to live through the insurance cycles."
For HFH—whose Health Alliance Plan (HAP) was born in 1960 from automaker union and community members championing high-quality, affordable healthcare—that's meant braving everything from the genesis of DRGs and tightly managed care in the 1980s and 1990s to the emergence of Medicare Advantage in the 2000s.
Sure, it's a rollercoaster, but success is possible with staying power and prowess. Here’s how to do it.
WHAT DOES IT TAKE and how do you do it?
Clear benefits aside, getting an in-house offering up to scale at speed is a big challenge.
"What we've seen over the past 10 to 15 years is provider-sponsored health plans that are really challenged to grow a large enough market share or bolus of members to mitigate risk, particularly in a new insurance company," says Brian Fisher, Guidehouse's director of healthcare strategy, provider and payer.
To ramp up, providers often accept "significant discounts on their own health plan," says Richard F. Bajner, partner and payer and provider leader at Guidehouse. And with capital constraints being what they are today, CFOs should ask themselves whether these cuts, which can be as high as 30% to 50%, are the right move.
Here's what can make the juice worth the squeeze.
Analysis: You need a good read on the regulatory environment, especially for government payers, as well as the competitive landscape for commercial entities, Damschroder stresses. And that includes what's on the horizon. "We've had to change with the times as different programs and different emphases come into play," she says. Without this expertise and foresight, "you can lose a lot of money, and then quickly, it feels like a money pit."
Capability: Sponsoring a health plan requires "a completely new set of capabilities, particularly on the administrative end, that, without a partner, have to be created from scratch or contracted out," Fisher says. So prioritize finding the right collaborator—or developing the requisite skill sets in house, Damschroder advises.
Balance: Ensure your offering covers people in a range of health circumstances, or risk getting "kicked out of the market," Damschroder says. "When you look at the COVID cycle that's just gone on, there's been a lot of volatility in medical claims, right, and you actually have to have the fortitude to maintain your risk-based capital with the department of insurance in your state," which wants to know that you're "investing and supporting the medical claims activity."
Stamina: This isn't "a get rich quick scheme," Damschroder says. "You have to be in it for the long term; it's not a three-to-five–years game where you're automatically going to be making money." It means "doing what's right for the community and getting those health outcomes," as well as "pricing reasonably" and making enough profit to cover losses, particularly in the Medicare and Medicaid domains. Also look for openings in the market.
As an example, UnitedHealthcare is focused on profitable services (e.g., ambulatory and physician) and "staying away from hospitals," Damschroder says. "That would be our domain."
(More) collaboration: "Many times, even within a health system that has a payer and a provider side, they still are not as close as you would think they were," says Richard L. Gundling, FHFMA, CMA, senior vice president of content and professional practice guidance at HFMA.
That's because infighting can flare around competing priorities, such as how to handle administrative hurdles like prior authorization and medical necessity. And it's the patients who suffer most.
"If somebody really needs back surgery, let's not delay it for three months to get them that surgery or to have them scared that they're going to get a huge bill at the end of it," Gundling says. "They're having back surgery. Let's alleviate that other stuff."
It takes a balancing act, Damschroder says. "Culturally, you have to be suited for that tension, and I think you also have to be well invested in the health of the population—of what you can do together, versus separately," she explains.
HFH has worked hard over the past two years to integrate its care management team across its provider and payer entities. The partnership has produced a protocol of care that limits pre-authorization requests between HAP and HFH to a handful of circumstances, such as when certain new drugs are in play or there's variability in how a service is being delivered across the system.
"Our clinicians and our medical management team at the plan have been able to come together to develop processes that aren't an administrative burden, don't cost a lot of money, and better yet, the patients' speed to care treatment is quicker," Damschroder explains.
Resolve: If a plan of your own is the right fit, don't let the challenges scare you away from a model that could improve care quality, access, and affordability for those you serve. "We're highly integrated into our communities, and I think we're a very important part of this ecosystem," Damschroder says. "There's a danger if we just hand this over."
The health system aims to bring patients, families, and the care team together through smart room technology, says this CNE.
As many health systems employ AI technology and virtual nursing, the idea of a "smart room" has come to the forefront.
Smart rooms have stationary, built-in technology that can help improve nurse workflows and keep the patients safe and comfortable. Some of the technologies include ambient listening, virtual nursing setups, and smart beds and wearables that can help measure a patient's vital signs.
OhioHealth launched the new Pickerington Methodist Hospital in December 2023, which according to Cynthia Latney, senior vice president and CNE at OhioHealth, and HealthLeaders Exchange member, is an 86-bed hospital that will create a different experience for patients and their families.
According to Latney, the patients at OhioHealth are looking for value, safety, and connection with their caregivers, which are all aspects that can be addressed with technology.
"Coming out of the pandemic, we saw the benefits of using technology to help support our caregivers," Latney said, "and we saw the benefits of keeping our patients safe."
Technology
Latney was excited to bring the new technology, which is called the virtual care model, to OhioHealth, with the aim of bringing patients and families together.
The virtual care model, according to Latney, includes a large screen at the front of the patient's room and a camera. The patient can interact with the TV and use a tablet to find out who is on their care team, ask for the pharmacist or the meal trays, or to make general requests from the care team. Virtual nurses are also able to use the technology as part of their workflows.
The room technology also enables families to enter the hospital room without having to physically come to the hospital.
"If you're talking about somebody who's had a new baby and you have a large family, [and] you want to give the mom and dad some privacy, but they want to see the new baby," Latney said. "We're using the technology so the whole family can come meet the baby virtually and give the privacy to the mom and dad."
Integration with nurse workflows
The virtual care model has three aspects. The first is a primary nurse that sees the patient in person and is responsible for care. Then there is a patient care aid and the provider, and a virtual nurse who bridges any gaps.
"[The virtual nurse] sits in between the technology and looking at the medical record, and the care team that is seeing the patient directly," Latney said.
Many of the tasks that the virtual nurse does are what the primary care nurse can give to them, including shift reports, admissions and discharges, care coordination, and reviewing the record to make sure there is no missing documentation.
The virtual nurse also helps develop patient care plans and support new nurses.
"When you have a new nurse that comes into the room and they need support, then you have the [virtual nurse] that pops in that can be there in the background to help support them," Latney said, "or they can be the second eyes for a nurse who needs a double check."
A virtual nurse remains in place 24/7 to help no matter what, Latney said.
"Today when our nurses are thinking about leaving, it is about their environment and all the things they have to do," Latney said.
The virtual nurse helps reduce the bedside nurse's anxiety and their workload so that they can spend more time with the patient.
"As nurses, we want to be there for our patients and our families, and not spending a lot of time on the phone or in the medical record," Latney said, "but really be able to function and practice at the top of [our] license."
Outcomes
The nurse and patient reaction to the new hospital has been positive, according to Latney. The nurses value the technology and are happy to have someone there to help with documentation and pulling information, which is a burden that would typically fall on them.
The patients also appreciate having somebody there that they can call at any point for questions or other information without worry, Latney said.
"They understand the importance of having a primary nurse with them," Latney said, "but when they need to reinforce information or they have a question, they really think about their nurses and who they're pulling away from."
The care model has also benefited nursing students, according to Latney. New graduate nurses now have the support they need from a more experienced nurse at the push of a button.
"Our nursing students come into Pickerington Methodist Hospital, and they [say], 'I just feel so good that I have somebody that's with me,' and they can't wait to graduate and come join the team," Latney said.
In terms of ROI, Latney said service and quality scores have increased or remained positive, and staff satisfaction has been positive. Leadership asked the front lines to design the model collaboratively, so the staff felt valued throughout the process.
"We knew that they needed support," Latney said, "but we wanted to make sure that we designed it based on their feedback and what they valued."
Latney pointed out that the program is still new, and that it will take time to measure all of the possible outcomes of the new hospital.
"It's a new hospital, so we're going to need time to really evaluate the impact of this new model," Latney said. "At the same time, we understand this is a model for the future."
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Workplace violence prevention takes efforts from the health system and the community, according to this nurse leader.
HealthLeaders spoke to Mary Beth Kingston, executive vice president and chief nursing officer at Advocate Health, about how to CNOs can prevent workplace violence. Tune in to hear her insights.
Health systems are investing heavily in the patient experience. At Springfield Clinic, that strategy is critical to continued sustainability in a complex market.
Despite recent missteps by disruptors in the primary care space, the greatest threat to health systems and hospitals is retail healthcare. That’s why it’s important not to overlook the patient experience.
And patients don’t want to deal with paperwork, especially when they’re not feeling well.
Healthcare organizations are using digital health tools and telehealth portals to reduce the administrative burden on patients seeking care and shorten the time between entry and treatment. They’re also embracing remote patient monitoring and other platforms that bring care directly to the patient.
For an industry that traditionally waits for patients to come to them, it’s a new strategy.
“[Healthcare] is a very antiquated process,” says Zach Kerker, chief brand and advocacy officer at Springfield Clinic. “From how you schedule appointments, to how you complete processes in order to get in to see your physician, to coming into the office and having your last name shouted at you and being marched through a room of people, it’s a cold cattle-call-like experience.”
The Illinois clinic, comprising more than 650 physicians and roughly 80 specialties, is addressing engagement with a patient experience department, led by Kerker, who joined the health system in 2018 after a career in sports reporting and digital sports development.
Kerker is acutely aware of the inroads made by Amazon and others in fashioning a retail healthcare experience that focuses on convenience and accessibility. Today’s consumers, he says, favor that experience over the visit to a doctor’s office, clinic, or hospital. When they’re sick, he says, all they want is care.
That’s why health systems and hospitals are prioritizing their innovation efforts on making healthcare more personal. They’re investing in strategies and technology that reduce the paperwork and improve scheduling processes, including more intuitive patient portals and tools that allow patients to schedule their own appointments online.
It’s not an easy investment to make, given the trying times for many hospitals and health systems trying to stay in the black.
“It’s difficult to do because the economics of healthcare are very difficult right now,” Kerker notes. “But what I would say is it is an investment and it does bear fruit, and if you want longevity in a world where everybody can give it to you quick and easy, who’s going to give you their heart? Who’s going to show up and be emotionally invested with you? Is going to matter in this space.”
The results of that strategy are seen in improved patient satisfaction scores, as measured by surveys and valued by the Joint Commission, among others. Kerker says those efforts are helping Springfield Clinic keep their patients and attract consumers in a complex healthcare environment.
Kerker says that engagement strategy actually begins before the patient sets foot in the hospital. Supported by digital health tools, the health system reaches out to a patient before an appointment to gather information, including insurance details and all data pertaining to the visit.
“So when you walk in the door, we’re welcoming you,” Kerker says. “You’re walking in and we’re not demanding information from you, which is not a particularly warm experience. We’re asking you quite literally what can we do to help you and care for you today?”
To make that possible, Springfield Clinic partnered with Health Note to handle patient self-scheduling, intake and clinical documentation and integrate data collection with the health system’s athenahealth EHR. The two had first worked together in 2021, creating a digital front door for a small, rural urgent care facility; that project saw a bump in patient satisfaction scores and a sharp increase in at-home completion of forms and led to a much larger installation in 2022.
Kerker sees technology partnerships as a key to success. Health systems and hospitals don’t have the expertise or the resources to develop and manage their digital footprint, so they need partners to handle the details. This also gives leadership more time for focus on change management.
“The most ironic part about this is that people understandably expect that technology reduces the human interaction,” he points out. “But what we’ve tried to do is use technology to complement a better human experience.”
A challenge for many health systems is finding a digital health platform that can accommodate the nuances of different specialties and departments, rather than relying on a one-size-fits-all approach. Kerker advises sitting down with the vendor to map out how a patient would access each department or specialist, and what protocols would be needed to support that journey.
That’s where the retail industry has a head start. Companies like Amazon, Apple and Microsoft have the consumer experience figured out, whereas healthcare has to catch up.
“We are behind most industries in adopting this technology,” Kerker notes. And while some of the bigger disruptors are having problems figuring out healthcare, he says, healthcare leaders shouldn’t be lulled into complacency.
They “are very smart and they will figure these things out,” he says.
Healthcare organizations have an advantage over disruptors in their history of caregiving, but that can only go so far. Kerker says hospitals and health systems need to build on those relationships by making the healthcare experience more modern and convenient. That’s why staff and clinicians at Springfield Clinic are encouraged to greet patients at the door, call them by their first names, thank them for coming in today, and ask what can be done to make their visit better.
Kerker says the patient experience will improve as the technology gets better, especially as new tools like AI speed up the process.
“We’re at the doorstep of kind of growing out of that stage of clunkiness in the technology side and into a more fluid experience,” he says.
The company announced that its reorganization plan received court approval. What's next for the company?
Cano Health has successfully climbed out of bankruptcy months after entering restructuring, the primary care chain announced.
By converting more than $1 billion of funded debt into common stock and warrants, and receiving a commitment of more than $200 million from existing investors for its business plan going forward, Cano said it emerged from Chapter 11 as a reorganizing private company.
In February, the provider filed for bankruptcy and was delisted from the New York Stock Exchange following a significant stretch of financial trouble that saw it accrue liabilities in the range of $1 billion to $10 billion.
With a “significantly improved capital structure and optimized operations,” Cano will now turn its attention to its Florida market.
"We are taking a disciplined and strategic approach to our growth over the next few years, with the primary goal of improving services for patients within our existing Florida footprint, which now consists of 80 locations,” Cano Health CEO Mark Kent said in the news release.
“We are already seeing encouraging results across our improved platform, and I am immensely proud of our associates for their continued dedication to our patients throughout this process. Despite the challenges we have faced as an organization, we have emerged as a stronger and more focused company with a bright future."
Necessary shake-up
Cano said it is on track to hit its goal of $290 million in annualized cost reductions by the end of this year, with $270 million in cost reductions and productivity improvements already achieved.
The company was forced to make changes after reporting net losses of $270.7 million and $491.7 million in the second and third quarters of last year, respectively.
Liquidity was partly achieved through strategic divestitures of underperforming expansion markets, including the sale of its Texas and Nevada primary care centers for nearly $67 million to Humana’s CenterWell Senior Primary Care business.
Cano also exited operations in California, New Mexico, Illinois, and Puerto Rico, while reducing its workforce in the third quarter of last year by 21%.
Additionally, Cano announced leadership changes to its board of directors to better align with its planned path. Alan Wheatley, a former Humana executive who ran Medicare and Medicaid programs, will join the board as Executive Chariman, serving alongside two other members, Kent and Eric Hsiao of Nut Tree Capital Management.
Registered nurses play a key role in the healthcare workforce and contribute to the health and well-being of millions of Americans, working in hospitals, nursing homes, physician's offices, and home health services. The profession has been experiencing shortages, which were exacerbated by the COVID-19 pandemic and are predicted to continue over the next decade as the 65 and older population in the U.S. grows, increasing healthcare needs. Demand for nurses will also likely increase to meet new requirements for nurse staffing levels in nursing facilities.
Immigrant workers could help address these needs. As of 2022, there were about 500,000 immigrant nurses in the U.S., accounting for about one in six of the close to 3.2 million RNs.1 However, immigration remains a hot-button political issue with ongoing anti-immigrant rhetoric and recent actions and proposals to limit immigration and immigrants' role in the workforce. These actions include the federal government extending its pause on the processing of new visa applications for international nurses in June 2024. The pause has been in place since April 2023 and, at this time, the government is only processing applications submitted on or before December 2021. Legislation has been proposed to increase employment-based visas for nurses, although it has remained stalled since 2023. Visa opportunities for nurses could also potentially be expanded through administrative action, for example via H-1B visas, though they would have limitations.
These visa restrictions could exacerbate existing shortages in the nursing workforce and negatively impact the U.S. labor market and economy more broadly, particularly given the growing role of foreign-educated nurses in U.S. hospitals. KFF analysis of data from the American Hospital Association (AHA) Annual Survey shows that the overall share of hospitals reporting hiring foreign-educated RNs has nearly doubled between 2010 and 2022, and a growing share of hospitals report hiring an increasing number of foreign-educated RNs to fill vacancies over time.
Overall, 32% of hospitals accounting for nearly half (45%) of all hospital beds say they hired foreign-educated RNs in 2022, twice the share in 2010, when 16% of hospitals accounting for about a quarter (23%) of all hospital beds said they hired foreign-educated RNs. In addition, between 2010 and 2022, the share of hospitals saying they hired more foreign-educated nurses to help fill RN vacancies compared to the previous year rose from 2% of hospitals representing 3% of hospital beds to 14% of hospitals representing 22% of hospital beds.
On this episode of the HealthLeaders podcast, Finance Editor Marie DeFreitas is joined by Chief Executive Officer of Confluent Health Dr. Kristi Henderson to discuss the benefits of mergers, as well as how to develop healthy partnerships, select the right partners, and ensure employee and clinician satisfaction throughout the process.
After roughly a decade of sometimes political wrangling, a new law mandates that payers reimburse providers for covered services offered via telehealth.
Long-standing barriers to telehealth adoption in Pennsylvania are coming to an end with the passage of a new law that includes coverage parity.
Governor Josh Shapiro last week signed into law SB 739, ending a decade-old battle to ease barriers that have kept hospitals and health systems in the Keystone State from embracing virtual care. The new law requires health insurers and managed care plans to reimburse providers for any covered services that are offered through telehealth, as well as setting accessibility standards for state Medicaid and Children’s Health Insurance Program (CHIP) coverage.
“Every Pennsylvanian deserves to have access to quality, affordable healthcare when and where they need it – and it shouldn’t be up to an insurance company to pick and choose what they cover,” Shapiro said in a press release. “More and more Pennsylvanians are relying on telemedicine to see their doctors, and this bill requires insurers to cover services delivered via telemedicine the same way they cover traditional in-person services. My administration will continue to work across party lines to expand access to healthcare for all Pennsylvanians, including those in our rural communities.”
The signing ends more than 10 years of efforts by telehealth advocates to get a parity law on the books. More than 40 states now mandate coverage parity, which requires payers to reimburse providers for telehealth services if they offer those same services in person. Some also require payers to reimburse at the same rate as in-person care, which is called payment parity.
The bill was sponsored by State Senator Elder Vogel, Jr., a Republican from rural Rochester who has long argued that the state needs to reduce telehealth barriers to improve access to care in rural and remote regions where brick-and-mortar providers are scarce and in-person visits are challenging. Some 33 Pennsylvania hospitals have shut down in the past 20 years, with 15 occurring in just the last five years, according to the state.
Vogel first sponsored the bill in 2016, but it never got out of committee. At least two versions introduced since then were shot down by Democratic lawmakers after Republican lawmakers added amendments to ban the use of telemedicine in abortion care. In 2020, then-Governor Tom Wolf, a Democrat, vetoed the bill after it was passed along party lines.
Among those supporting the new law is the Hospital and Healthsystem Association of Pennsylvania (HAP), a membership organization comprising more than 230 hospitals and health systems in the state.
“Today’s passage of Senate Bill 739 is a long-sought win for Pennsylvania patients and health care providers,” HAP president and CEO Nicole Stallings said in a press release. “Telehealth helps meet patients where they are, increasing access to routine and preventative care to improve health outcomes. It also extends the reach of providers at a time when the commonwealth’s growing need for care is outpacing the professionals available to deliver it.”
