Browse by Topic
More than 40,000 members value HFMA's thought leadership and practical strategies. HFMA is where you need to be.
Get acquainted with the
healthcare finance industry's leading professional association. Find out why our
members rely on HFMA as their go-to source for insight and
Members have many
options for helping them advance their careers. Conferences, seminars,
eLearning, certification, and more -- our education and events will keep you
Connect the dots on today's big issues, explore collaborations, get career-boosting tips, and network with colleagues nationwide at the leading finance conference. Save $100 off the full conference rate when you register by May 8.
Real-time presentations with nationally recognized experts, networking opportunities, and industry solutions—no travel required!
Get the latest, practical education in key areas of healthcare finance over 1, 2, or 3 days. Choose Essentials Programs or Master Sessions in DC or Seattle. Register early and save $100.
If you're a subscriber to any of our three newsletters, you have access to online education. Learn more or subscribe.
Get the perspectives of leading healthcare finance professionals on today's hottest issues.
Information about leading vendors helps your buying decisions.
Forum members can network during live webinars or access a library of past webinars on topics such as bundled payment, charity care, and ICD-10.
An ever-expanding collection of spreadsheets, policies, job
descriptions, checklists, and more that you can adopt and adapt.
Forum members can submit vexing questions to a panel of experts
using our Ask the Expert service.
Your source for employment solutions.
Find new employment opportunities or
reach out to qualified candidates.
Distinguish yourself as a
leader among your peers and advance your career by earning certification in our
healthcare finance programs.
Get an objective third-party evaluation of products and services used in the healthcare finance workplace.
MAP App is a web-based application that helps organizations improve revenue cycle performance based on industry-standard metrics called MAP Keys.
Find suppliers and products in this comprehensive vendor directory for healthcare finance professionals.
Guidance for understanding and communicating about the price of health care.
Guidelines on how to make it easier for consumers to get information about healthcare prices.
Improve your revenue cycle performance through standard metrics, peer comparison, and successful practices.
As the country makes the shift to value-based care, many hospitals and health systems are contemplating how best to start managing population health under risk-based payment arrangements. As part of that equation, some organizations are considering whether their chances of succeeding in the emerging business model would be enhanced by developing, acquiring, or participating in provider-sponsored health plans.
Such plans typically are owned and controlled by one or more hospitals or health systems and can be a significant strategic asset in certain markets. But the decision whether to take on management of a health plan is a complex one. There is great variability from market to market, and careful evaluation, planning, and execution are essential. In many instances, it may be best to decide not to proceed.
For provider-sponsored plans to be successful, they must have appropriate scale and be underwritten, operated, and marketed in a manner consistent with the organization’s overall strategic plans.
Provider-sponsored health plans proliferated in the late 1980s and throughout the 1990s, when several hundred hospitals and health systems entered the health insurance business. The surge was driven by numerous factors, including the anticipated movement to capitation under managed care, a lack of competition among insurer-owned health plans, and the hope of achieving the margins enjoyed by those companies. Most provider-sponsored health plans formed at that time either failed or were sold. Only about 100 to 150 sizeable plans remain.
Today, many of the factors that drove interest in provider-sponsored plans 20 years ago have resurfaced with the implementation of the Affordable Care Act (ACA) and the transition to a value-based payment model. These forces, combined with the advent of health insurance exchanges this fall, have generated even greater interest among providers that want to offer a health plan directly to their patient population.
Several factors contributed to the inability of provider-sponsored plans to succeed in the 1990s, including the failure to achieve enough scale to manage risk, the lack of an adequate provider network, and poor underwriting. Providers currently considering entering into the health insurance market can learn from their predecessors. Past efforts suggest that a provider’s success depends on its ability to:
In addition, for plans to be formed by multiple provider sponsors, the sponsors must be able to both compete and jointly govern a health plan.
Organizations today that are considering whether to move into the health insurance business should carefully consider their options. Seeking outside expertise is recommended to help identify and evaluate existing provider-sponsored health plans in the region, and determine the best path forward based on a solid strategic-financial analysis.
Opportunities may exist either to join an existing multiprovider-sponsored plan or to merge an existing plan with another provider-sponsored plan. Such arrangements allow hospitals and health systems to more quickly achieve the scale required to assume utilization risk. As noted previously, however, the long-term viability of plans with multiple provider sponsors may be uncertain. The chances of success are greatly improved if potential partners serve different patient populations and if they maintain individual control over underwriting decisions and sufficient financial risk for services provided in their respective markets.
Developing a new provider-sponsored plan poses more challenges, and the associated risks likely are too great for most hospitals and health systems. Competition may be formidable from large established commercial health plans that have experience, large capital reserves, and economies of scale. In most cases, it may be advisable to consider partnering with an existing payer to form a narrow network product, or work with an outside firm that specializes in developing health plans. Even so, each opportunity is unique and requires thorough evaluation. Provider-sponsored health plans may be able to gain niche positions in given markets, but controlling out-of-area claim costs will continue to be a challenge.
Organizations that opt to establish new plans should engage in comprehensive planning to mitigate potential risk from the very significant capital investment, actuarial, and management expertise requirements. They should be prepared for losses that could be much greater than investment costs and returns, even in the long term.
Developing an insurance offering for the health insurance exchanges that are opening for consumer enrollment in October under the ACA may be the right-sized playing field for certain provider-sponsored plans due to their defined geographic scale. Again, rigorous planning is required to mitigate financial risk.
Mike Finnerty is a managing director with the mergers and acquisitions practice of Kaufman, Hall & Associates, Inc., Skokie, Ill.
Publication Date: Wednesday, May 29, 2013
Russ Graney, founder and CEO for Aidin, and John Laursen, head of business development for Aidin, share insights on how to improve care transitions between acute and post-acute care settings and incentivize high-quality patient outcomes.
Scott Elston, strategic accounts manager, GE Healthcare Services, describes how substantial cost reduction in health care requires rethinking business strategy and asset use.
Robert Williams, MD, director, Deloitte Consulting LLP, and Arielle Freiberger, product strategist, ConvergeHEALTH by Deloitte, explain how sophisticated retrospective, real-time, and predictive data analytics can inform decision making to reduce costs and improve care.
Stuart Hanson, director of business development (healthcare solutions) at Citi Retail Services, discusses how improving the payment experience can benefit consumers and healthcare providers.
Scott Schmidt, vice president, Cerner RevWorks, LLC, shares insights on best practices for maximizing a revenue cycle management partnership.
HFMA's print, email, online, and mobile opportunities provide you maximum reach and impact. We will work with you to build a plan that meets your needs. Contact a sales rep.
HFMA offers online, email, and print opportunities to help you recruit the most talented healthcare finance professionals. Place your classified ads today.
Drive down costs while improving quality in a reform environment.
Stay informed about new directions in healthcare finance. Share tools and strategies for improving performance. Be an active participant in your profession. Together, we’ll reshape the business and practice of healthcare. Join us.
©2015 Copyright Healthcare Financial Management Association
HFMA.org is best viewed using IE9 or the latest versions of Chrome, Firefox, and Safari.
Join HFMA today and enjoy: