Academic journal article Frontiers of Health Services Management

Trudy Land, Fache

Academic journal article Frontiers of Health Services Management

Trudy Land, Fache

Article excerpt

The seismic shift from volume to a value-based system has created opportunities and risks for hospitals and healthcare systems with respect to developing health plans as a strategic advantage in their markets. Although several organizations started such plans in the 1980s and 1990s, many did not succeed because they lacked experience, scale, or networks of sufficient size or faced financial problems. In the past few years, provider-sponsored health plans (PSHPs) have again become popular because of the Affordable Care Act and the health insurance exchanges, the need to cut costs and manage population health, and the opportunity to capture the entire premium dollar.

As inpatient revenue shrinks and organizations focus on disruptive market forces, competitive dynamics, and new business models, healthcare leaders are analyzing health plan options. Some organizations may decide that starting a health plan is too risky and expensive; others may conclude that they have the necessary competencies to develop insurance products; and yet others may choose to partner with an established insurer or another provider. Deciding to start a health plan requires careful analysis of the organization's ability to manage population health and risk-based payments.

Developing a health plan can be a challenging and lengthy process, and due diligence is critical. In determining organizational readiness to enter the health plan business, healthcare organizations must consider their position and brand identification in the market, alignment with a provider network across the care continuum, financial ability to assume risk and meet capital requirements, providers' clinical quality, population health management experience, and information technology and data analytics capabilities, as well as the costeffectiveness of the health plan, regulatory compliance issues, competitive pricing, geographic coverage, and relationships with other payers. Healthcare leaders have learned many lessons from the experience of the 1980s and 1990s. As healthcare continues to change, hospitals and health systems with insurance plans and those entering this business may have strategic advantages, but they also face significant risks. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.