Market Price

November 1, 2005

When Minalkumar Patel, MD, MPH, the president and COO of Horizon Healthcare Insurance Company of New York, feels fear along his career path, he welcomes the alarm as a hint of the challenges he craves. Just a year ago, at the age of 33, Dr. Patel accepted the challenge to lead Horizon Healthcare of NY, a rapidly growing health plan in a tough market that he was unfamiliar with. He says that if he weren't petrified, he wouldn't have taken the job.

When Minalkumar Patel, MD, MPH, the president and COO of Horizon Healthcare Insurance Company of New York, feels fear along his career path, he welcomes the alarm as a hint of the challenges he craves. Just a year ago, at the age of 33, Dr. Patel accepted the challenge to lead Horizon Healthcare of NY, a rapidly growing health plan in a tough market that he was unfamiliar with. He says that if he weren't petrified, he wouldn't have taken the job.

Fortunately, he has a long list of qualifications and experience from which to draw. A successful physician, Dr. Patel still practices at Brigham & Women's Hospital in Boston a few weekends a year. He also has a consulting background, a degree in public health from Harvard, teaching and research experience, and memories of his world travels during which he practiced medicine in Thailand, India and Africa.

Now as the leader of Horizon Healthcare of NY, his challenges originate a little closer to home where competition and consolidation shape the local market. The plan is a smaller player in an ocean of large systems and strong influence.

New York has large provider systems, much like parts of California, where physicians combine into independent practice organizations with leveraging power that influences reimbursement rates. Hospitals, too, have strength in their numbers.

"It's a tough market to operate in," Dr. Patel says. "The hospitals and physicians have a higher level of organization. You have marquee institutions with national and international brands that you're negotiating with, such as Columbia, Cornell and New York University. It's different from the New Jersey market, which is much more representative of what the American healthcare system is like. New York is a vastly different landscape."

He says negotiating with a dominant hospital system is more challenging than negotiating with each hospital independently. And there are a lot of facilities in the coverage area: Horizon Healthcare of NY includes 103 hospitals in its network for 180,000 members in 10 counties, while Horizon BCBSNJ includes 78 hospitals for its 3.1 million members in the entire state of New Jersey.

Even with the consolidated provider market and its leveraging power, hospitals are losing money, and it produces a domino effect, he says. The hospitals ask for increased rates, which puts a smaller plan like Horizon Healthcare of NY at a disadvantage because it lacks the counterleverage of a large member base.