A key to success in MA partnerships with health plans is building a relationship in which leaders from each organization communicate well about their expectations and differing responsibilities.


July 23—After hospitals and health systems have had some highly publicized struggles operating their own Medicare Advantage (MA) plans in recent years, two health systems recently opted to partner on an MA plan with an insurer.

Ohio-based TriHealth and St. Elizabeth Healthcare intend to partner in MA plans with Mutual of Omaha and value-based payment consultancy Lumeris in the greater Cincinnati area. TriHealth and St. Elizabeth Healthcare will offer the clinically integrated network (CIN) they launched in 2014 as the provider network for the plans.

“We really wanted to spend our efforts and our energy transforming our care delivery network,” Randall Curnow, MD, medical director for population health at TriHealth, said about the decision to partner instead of launching its own plan. “We thought it would make more sense to focus our energy on the care delivery transformation and find a partner who could help us with the insurance functions.”

That partner, Mutual of Omaha, will launch its first Cincinnati-area MA plans in 2019.

“It was more advantageous for us to find a partner than to, for lack of a better word, dilute our resources on trying to master that skill while trying to improve and enhance what we felt was the primary” focus of our organization, Curnow said in an interview.

Lori Ritchey-Baldwin, CFO of St. Elizabeth Healthcare, said the health system’s lack of expertise in operating a health plan drove the decision to partner with the insurer.

“From the St. Elizabeth philosophy, our focus and what we’re good at is taking care of patients, so we’ll stick to that,” Ritchey-Baldwin said in an interview. “So, we’ll let them do what they’re good at and we’ll do what we’re good at.”

Plan-Launching Challenges

Twenty-seven percent of major U.S. health system executives participating in a recent survey intend to launch an MA plan in the next four years. However, among 90 health system executives in a survey released in June by Lumeris, only 29 percent of those intending to launch an MA plan felt confident in their organization's ability to do so successfully.

Although health systems have been tempted by the potential of MA plans to capture the entire premium dollar and allow them to reap the full benefit of taking on added risk, a number have folded their MA plans in recent years.

“There have been some healthcare systems that have been very successful with that and some, even fairly local to this region, not so successful,” Ritchey-Baldwin said. “So, [insurer partnerships] are the path we’ve gone down, and we’ve found some good partners to do that; Mutual of Omaha being one of them.”

The CIN of TriHealth and St. Elizabeth, called Health Solutions Network, first served as the provider network for a UnitedHealthcare MA plan in 2014. But the new arrangement aims to go beyond the traditional health plan-provider relationship.

Mutual of Omaha “worked very hard with us to say, ‘We’re willing to share more in the overall percentage of savings if there are shared savings that TriHealth and St. Elizabeth can help generate for the plan,” Ritchey-Baldwin said. “So it’s just a different incentive structure.”

Although Ritchey-Baldwin was not free to give details on the shared savings arrangement, such incentives are in addition to components of the MA contracts that relate to quality metrics and that the health systems will have to meet—and those also are tied to reducing the overall cost of care. For example, such contracts might require that 85 percent of women covered by the plan meet mammography screening guidelines.

“We work really hard to call those patients and make sure they are coming in to their screenings or getting them in for their annual wellness visits,” Ritchey-Baldwin said in reference to an MA population that has been trending beyond 50 percent of the health system’s Medicare patients.

In the Cincinnati-area market, 40 percent of Medicare beneficiaries are enrolled in MA plans.

Keys to Success

Hospitals and health system executives looking to launch their own MA insurer partnerships may benefit from some of the keys to success that Curnow and Ritchey-Baldwin identified.

For instance, Ritchey-Baldwin found that such arrangements work best when they are built on close relationships, where the local administrators from each organization communicate clearly and often.

“We really need to understand what Mutual of Omaha or any other payer is going to do to coordinate care and reduce the costs of care, and what are they counting on us to do,” Ritchey-Baldwin said. “Early on in MA contracts, maybe that wasn’t as clear.”

Such communication also can help create efficiencies and eliminate duplication of effort.

“We don’t want to have Mutual of Omaha calling about the annual wellness visit when we’re calling, too,” Ritchey-Baldwin said.

Another component of good partnerships is a focus on not only an overall reduction of the cost of care but also the revenue implications. Ritchey-Baldwin urged hospitals and health systems to seek partnerships with insurers that score higher in the MA star ratings program because Medicare provides such plans with larger payments to manage their networks.

“You want to make sure that they are a good payer and that they are doing everything they can to maximize the revenue, because that revenue also comes into play when we look at the contracts with the various payers,” Ritchey-Baldwin said.

Another key, Curnow said, is finding a health plan partner with both the resources and the flexibility to provide the infrastructure for and experience in actuarial operations. The flexibility is key to allow delivery approaches to differ based on variations in local markets.

Mutual of Omaha “is working with us on how we can make a delivery vehicle that is superlative for our patients and our market,” Curnow said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Tuesday, July 24, 2018