Mayo Clinic, Medica to Launch Joint Insurance Plans

The plans will be offered nationwide, working with local providers who will funnel complex care to the Rochester, Minnesota-based health system.

Mayo Clinic and Medica on Thursday announced plans to launch jointly developed health insurance plans that will be sold nationwide.

The two nonprofit, Minnesota-based companies said in a joint announcement that the health insurance products will tap into one another's clinical, administration, and customer service expertise.

The plan is to partner with local healthcare systems, to ensure easy patient access to care venues. When rare and complex care is required, however, providers will have the option to send patients to Mayo Clinic.

"Mayo Clinic and Medica share a commitment to collaboration, compassion, customer service and innovation. Together, we’ve worked diligently to advance health care, improve the consumer experience and make healthcare delivery more efficient," Medica President and CEO John Naylor said in a media statement.

"This expanded relationship will benefit not only both organizations, but also the people in the communities we serve," he said.

In growing numbers over the past several years, hospitals have been offering health insurance plans, in large part as a bulwark against the consolidation of the health insurance industry. The private exchanges created under the Affordable Care Act have made it easier for health systems to enter the insurance market and compete with established payers.

Allan Baumgarten, a veteran observer of healthcare trends in the Midwest, said the deal "strikes me mostly as a marketing strategy."

"It's not described as a real joint venture health plan, like Aetna has with five provider systems or Oscar has with Cleveland Clinic," Baumgarten says. "It sounds more like a Bright Health model of narrow networks with key provider groups, but putting out the marketing message that your doctor can refer you to Mayo Clinic—not that you can self-refer to Mayo Clinic."

"Those provider groups probably do not include prominent academic medical centers or other large systems, because they wouldn't want their patients to leak to Mayo Clinic," he says.

Mayo and Medica have a history of collaboration. They've developed accountable care organizations for commercial group and individual markets in Southeastern Minnesota and Southwestern Wisconsin. Mayo is also a center of excellence for many of Medica's other insurance plans.

In 2017, Medica acquired Mayo Clinic's third-party administrator business, MMSI, Inc., which does business as Mayo Clinic Health Solutions. Customers, including Mayo Clinic staff, will transition to Medica's technology platform and customer service model in January 2019.

"Our relationship with Medica and future product offerings support a collaborative model of care delivery and coordination of services with better outcomes for patients with complex and serious illness," Mayo Clinic CFO Dennis Dahlen said.