At-risk contracts are redefining the relationship between payers and providers as fee-for-service provisions are being replaced by pay-for-performance language. With providers assuming the clinical and financial risks of caring for a defined patient population, many are seeking the underwriting expertise needed to make those contracts viable business arrangements.
A talent pool that’s teaming with expertise is one that you might not expect. And that’s hospitals themselves. Despite the headlines that suggest hospitals are getting back into the health insurance business after existing it in the mid-1990s, the fact is, many never left it. They stuck with it and are now well-positioned to take advantage of the post-reform healthcare environment. That is, unless they lose their contracting experts to competitors.
According to the , some 253 hospitals owned in whole or in part a traditional indemnity health insurance plan in 2011. Some 640 hospitals owned in whole or in part an HMO. And 744 hospitals owned in whole or in part a PPO. In terms of the hospital universe that year, those figures represent 5.1%, 12.9% and 15%, respectively, of the 4,973 general acute-care hospitals surveyed by the AHA that year.
Four years earlier, those numbers were essentially the same. In 2007, some 6% owned indemnity insurance plans; 12.9% owned HMOs; and 17.2% owned PPOs. So despite the tumult in the industry three years before the Patient Protection and Affordable Care Act became law in 2010 and in the year after it did, the hospital-owned health insurance business was pretty stable.
Consequently, those providers who want to get into the business or want to return to a business they abandoned 15 to 20 years ago, have hundreds of experienced hospitals from which to draw knowledge and expertise.
Among those who’ve recently announced plans and intentions to become or expend their health insurance businesses are, in alphabetical order:
- in Charlotte, N.C.
- Catholic Health Partners in Cincinnati
- in Chicago
- in Fountain Valley, Calif.
- in Atlanta and WellStar Health System in nearby Marietta, Ga.
- in Sacramento, Calif.
So, if you’re a hospital or hospital system that entered into the health insurance business years ago and have stayed with it, you may want to consider raises and/or promotions for your contracting managers and executives lest they be lured away by the growing number of competitors that need your expertise and experience.