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Six New Jersey Health Systems Borrow a Page From Amazon

Analysis  |  By Philip Betbeze  
   April 12, 2018

By combining their self-insured plans for a third-party administrator bid, the health systems hope to reduce administrative costs, but that's just the beginning.

Six New Jersey health systems that self-fund their employee health benefits are combining their nearly 50,000 employees and dependents under a single health plan that they hope will be able to cut costs and improve access to high-quality healthcare.

Atlantic Health System, CentraState Healthcare System, Holy Name Medical Center, Hunterdon Healthcare, St. Joseph's Health, and Saint Peter's Healthcare System, all of which will remain independent, formed the Healthcare Transformation Consortium, which will select an insurance carrier as a third-party administrator through a competitive bid process.

The six systems liken their combination to the recent announcement that Amazon, Berkshire Hathaway, and JPMorgan Chase will join forces to attack high healthcare costs and inefficiency.

The consortium says it thinks it will be able to reduce administrative fees associated with providing healthcare benefits.

Moreover, it will eventually serve as a model for other self-insured employees and could be replicated nationally, says Kevin Joyce, vice president of insurance networks for Atlantic Health System, a six-hospital health system based in Morristown, New Jersey, who proposed the deal.

"It certainly hasn't been done in this state before," he says.  


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Philip Betbeze is the senior leadership editor at HealthLeaders.

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