Jack Towsley

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A health plan executive, a delivery system chief medical officer, and hospital administrator sit in a conference room waiting anxiously for their meeting to begin.

If I asked you to guess the meeting’s agenda, you might answer “settling a disagreement about prior authorizations,” “disputing a payment,” or “renegotiating rates.”

Settling. Disputing. Negotiating. These are words often used to describe the typical provider-payer relationship today.

But, what if the meeting was about another word? What if it was about collaboration?

In a provider-led health plan, the purpose, values and culture of these three executives are shared, as are their bottom lines. How does that change the types of conversations that happen between a provider and a payer? And, more importantly, how do those conversations lead to more positive patient, member, and financial outcomes for the entire health system?

These are questions that many provider organizations are asking themselves today. In a landscape of declining private and government reimbursement and an increased focus on pay-for-performance and provider risk-sharing, provider organizations are looking for additional sources of revenue to sustain their operations while remaining true to their purpose to deliver quality care. 

For some, that transition might include starting or strengthening a provider-led health plan-an uncomfortable, often risky, undertaking for a traditional delivery system.

Of the 42 health plans that providers have either launched or acquired since 2010, only four were profitable in 2015, according to a June 2017 

 by the Robert Wood Johnson Foundation. A follow-up to the same study explored how successful provider-led plans are finding success in joint ventures.

Provider-led plan joint ventures give provider organizations access to the scale and efficiency of health plan operations while allowing them to drive decisions for the member-patients they serve. Many of these joint ventures are between provider organizations and traditional insurers.

The result? A provider organization that also happens to have a health plan.

This can lead to an identity crisis of sorts-does the provider organization manage the health plan for what its care delivery system needs or does the health plan guide care decisions for the delivery system?

There is a third option and that is full integration of the provider organization’s health plan with the delivery system. Through integration, the outcomes for patients, members, clinicians, and the organization can be remarkably positive. Three areas in which we see these results include:

. From a data perspective, integration of claims data and electronic health record information can lead to innovative and distinct population health programs. Data integration allowed Presbyterian Healthcare Services, an integrated health system and the largest provider in New Mexico, to develop a program that provides intensive home-based care to Medicare Advantage members in their last years of life. The program, called Complete Care, addressed the needs of a critical group that represented 5% of the plan’s total Medicare Advantage population but accounted for 64% of the cost. Through the Complete Care program, high-risk members have access to in-home interventions. This includes care coordination, telemonitoring, palliative care, home health, social workers, and foot care. As a result, costs for the Medicare Advantage HMO declined 21.4% for skilled nursing facilities and 10.3% for inpatient rehabilitation between 2015 and 2016. So far, the program has seen readmission and hospitalization rates that are 50% less than predicted for this population.
 

 by J.D. Power concluded that integrated health plans dominated member     satisfaction scores over traditional insurers. A driving factor in the higher satisfaction? The study sites “reducing friction points for members” through greater coordination of care. The same study also found that provider organizations that partner with traditional insurers do not see the same results as those that are integrated with a delivery system. As government reimbursement policies continue to focus on member satisfaction, the positive financial and member satisfaction outcomes can be higher for those plans with an integrated provider system partner.
 

. As highlighted earlier, access to data spanning health plan claims and electronic medical records enables integrated health systems to uniquely manage the cost of care while also reviewing efficacy. While many provider-led plans may not have notably lower medical loss ratios, the financial impact to the larger integrated health system through care management can be significant, according to 2016 findings by 

. The integrated environment allows organizations to evaluate how to lower the costs of care while also improving quality and satisfaction to achieve the Triple Aim. From medication management to addressing the needs of the most chronic patients and members, an enterprise-view of data and subsequent decision-making based on that data translates into improved performance in a value-based healthcare landscape.

The results in each of these areas, and many more, are experienced only in an integrated environment where decision-making and accountability is shared equally across the health plan and care delivery teams. Critical to the success of a provider-led plan is choosing a partner with expertise in integration.

The right partner can help build scale and efficiencies, effectively reducing both start-up and daily operational costs for the provider organization. Many provider organizations struggle with the scale required to stand up a health plan. By working with a partner that has experience in integrated health plan operations, provider organizations can lean into and focus on developing care management models that work for their entire health system. Without a partner that provides that scale and efficiency, many provider-led plans fail as they have to spend time, money and energy on developing health plan operations from the ground up.

The risks in starting a provider-led plan can be high. But for provider organizations that want not only to transition but to thrive in a value-based healthcare environment, it can be the right decision for long-term sustainability and for the patients and members they serve.

Provider-led plans can lead the way for provider organizations looking to adapt and bend the cost curve. The next time you hear about a meeting with a health plan executive, chief medical officer, and hospital administrator, all belonging to an integrated health system, consider that their meeting agenda might just be “collaborating on a new program to improve the health of patients and members.”



Jack Towsley, MPH, MPP, serves as president of 

, is dedicated to completing the connections to health and care so people can enjoy their healthiest life, primarily through integration of the delivery and financing of care. Through 

 arm, health systems looking to create and implement a health plan will have access to scale and efficiency, as well as strategy, management, product design and administrative functions based on 

’s three decades of experience. Towsley has extensive healthcare management experience and has had executive roles in both national and regional health plans as well as delivery systems, where he has worked in both the hospital and physician segments.

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Starting or strengthening a provider-led health plan leads to true integration, resulting in quality care.

Author | Jack Towsley

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