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Hospital and insurer join forces to launch a co-branded health plan


Texas-based Memorial Hermann Health System and the Memorial Hermann Physician Network launched a co-branded health plan in a quest to operate more efficiently and grow market share.

In the shift from volume to value, Texas-based Memorial Hermann Health System and MHMD, the Memorial Hermann Physician Network faced a common, yet considerable, challenge: How could they operate more efficiently and drive market share growth?

Between downward rate pressures, declining reimbursement and increased competition, the 12-hospital system and its clinically integrated physician network needed to offset any decline in patient volume as it moved toward a value-based care model. Despite its position as the local leader with nearly 25% market share, Memorial Hermann knew it needed to act quickly.

Taking action
In 2011, Memorial Hermann leadership began exploring possible collaborations with insurers. These relationships would help increase revenue, keep patients in-network and expand the patient base.

The health system had already made great strides improving quality and lowering costs through its physician network’s clinical integration program. By building on the success of this program the health system would be able to participate in the financial rewards of its progress. This process set the stage for the formation of Memorial Hermann Accountable Care Organization (Memorial Hermann ACO).

By mid-2012, Memorial Hermann ACO received approval from Centers for Medicare and Medicaid Services (CMS) to join the Medicare Shared Savings Program (commonly referred to as MSSP). Shortly after, the organization decided to expand its accountable care strategy to include commercial value-based arrangements.

Launching Aetna Whole HealthSM
While Memorial Hermann offered health insurance products through its own health plan, expanding its ACO’s reach to include other payers’ products would help to drive more volume. In April 2013, Memorial Hermann ACO teamed with Accountable Care Solutions from Aetna (ACS) to launch Aetna Whole Health℠. This co-branded product is available to fully insured and self-insured employers in the greater Houston market. It helps achieve Aetna’s and Memorial Hermann’s mutual goals through a shared-risk arrangement. The collaboration directly addresses the Triple Aim of accountable care organizations– providing high-quality, low-cost care with an enhanced member experience. Memorial Hermann ACO is rewarded based on its ability to reduce costs and improve quality. The organization is at risk if cost and quality goals are not met.

Key factors for success
To launch the co-branded insurance product, Memorial Hermann ACO and Aetna took advantage of each organization’s unique strengths.  

For Memorial Hermann ACO, this included:                                                         

  • A clinically integrated physician network with aligned financial incentives and access to actionable data and scorecards.

  • Evidence-based medical practices developed by doctors and implemented across the organization through point-of-care tools.

  • Industry-leading patient safety and quality protocols.

  • An infrastructure to support population health.

  • A physician-led governance structure across the hospital system and physician network to reduce variations in care, enhance quality, and improve efficiency.

For Aetna, this included:  

  • Actionable analytics and reporting at the member and physician level, as well as claims data.

  • A dedicated engagement team to ensure success across sales, marketing, distribution, care coordination and health plan operations.

  • Care delivery and informatics support to coordinate care management and coordination activities and take effective action based on data and member needs.

  • A product plan design to encourage patients to stay in the Memorial Hermann ACO network.

NEXT: Lessons Learned


Lessons Learned
Launching a co-branded health plan product between an insurer and health system takes work. Both organizations must rethink their traditional roles. They must also apply innovation to bring about change.

Memorial Hermann ACO and Aetna credit several best practices for their success:

  • Jointly sharing and analyzing data. Payers rarely make claims (and other) data available to providers, but Aetna gives the ACOs it works with broad data access to claims data where legally permissible. This data helps create a complete picture of a patient’s treatment history and health status. Aetna’s Informatics team provides analytics and reporting information about the members most in need of attention. Memorial Hermann ACO physicians and care managers can then proactively provide those members the care they need. The reporting includes members recently discharged from the hospital, members with frequent visits to the Emergency Room, and members in need of complex case management that Aetna has been unable to reach and engage in its programs.    
  • Tapping new markets. Aetna’s marketing and distribution capabilities helped bring the new co-branded product to market quickly and efficiently. The product has been  delivering strong, consistent membership growth in Houston over the past 18 months. Aetna’s national presence and relationships have led to a number of sales opportunities across self-insured and fully-insured business lines.
  • Collaborating on care management and coordination. The Memorial Hermann ACO’s clinically integrated physician network combined with Aetna’s portfolio of more than 40 case management and disease management programs lead to more proactive care. Both organizations can identify opportunities for improvement and track the results. Providers have a better understanding of the individuals they serve. This insight has is enabling them to  more effectively target at-risk individuals, engage them in their health and support positive behavior change.

  • Using technology. Aetna’s approach to working with ACOs is extremely flexible and tailored to each ACO. Through their collaboration, Memorial Hermann ACO was able to leverage its existing IT investments. Today, MHACO uses electronic health records (EHR), population health management tools and health information exchange (HIE) capabilities. This technology enables quick and secure data-sharing between facilities, providers and patients. It allows the entire organization to take advantage of the data and analytics provided by Aetna.

The collaboration between Memorial Hermann and Aetna required both organizations to rethink their traditional roles to take advantage of each other’s strengths and integrate them to achieve success. Over the past 18 months, Memorial Hermann ACO and Aetna have honed their strategy, refined care management processes, and improved care coordination by taking advantage of the lessons learned and focusing on continuous improvement of their collaboration. Employers and patients in the Houston market are now positioned to achieve better health outcomes and cost savings for their health care services. And Memorial Hermann ACO is driving both market share growth and operational efficiencies, paving the way to a more sustainable future.                                                                                                                                

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