Legislative reforms, technological advances, and the shift to consumer-centered services have spurred the reemergence of provider-sponsored health plans (PSHP).
Done right, these narrow network plans give providers a sustainable approach to counter risks associated with value-based contracts. It also allows hospitals to capture “first dollar” revenue and enhance the health system’s brand within the community.
There are thousands of variables that are critical to the sustainability of this model. Undergirding all of them are three general pillars for success: understanding the payer landscape, investing in the right technology and infrastructure, and optimizing the patient/member experience.
Understanding the Payer Landscape
Health insurance is complicated. Even experienced payers can be thrown by constantly shifting ground. Exercising caution, organizations considering a provider-managed health plan should conduct market studies to determine which segments offer the best chance for success. Starting off by specializing in small and large groups, Medicare, Medicaid, or a sub-segment representative of the provider’s community enables a more merciful learning curve and room to scale.
Additionally, providers that lack the systems, knowledge or capital to administer a health plan effectively may consider partnering with an existing payer, where the payer manages the enrollment, administration and claims, and the provider takes care of marketing and branding.
Leveraging Information Technology
Other providers may decide to build a best-of-breed solution by selecting partners to manage key functions. Cloud-based solutions make it easy to launch quickly by eliminating the need for large, costly mainframes that are the backbone of traditional health payer systems, and simplify integration issues between vendors.
Providers also can opt for implementing a single integrated solution that easily scales to accommodate growth and new products; offers a retail-like experience for member acquisition and retention; and can be leveraged to build and maintain a strong broker network for distribution.
Optimizing the Customer Experience
Many payers are re-tooling their front office and back office processes to create a fully branded distribution and enrollment platform that offers a multi-channel shopping and enrollment experience for consumers.
For example, decision-support tools that compare health plans and drug prices, administer quotes, and assist with enrollment and renewals are critical to helping members take control of their health and financial security.
Tools that remind members of key wellness deadlines, like annual physicals, or help bridge gaps in their chronic care management program, enhances customer loyalty while also reducing costs and risk.
Moreover, portals where members can obtain health information and select appropriate coverage further extends the bond between member and PSHP.
The Future of PSHPs
The future of the Affordable Care Act and other critical health reforms are uncertain—at least until the new administration and Congress take office. As a result, we will likely see providers avoid plans that involve individual exchanges in favor of plans for Medicare Advantage and Medicare Advantage Part D. However, we may be closer than ever to unlocking a sustainable and profitable approach to provider- managed health plans.
About the author: Peter Urbain is Senior Vice President, Provider Segment, of Connecture, a provider of web-based information systems used to create health insurance marketplaces.