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.
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 Healthâ . 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:
For Aetna, this included:
NEXT: 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:
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.