June 16, 2017

Cleveland Clinic to sell health insurance plans

Daily Briefing

    Cleveland Clinic and Oscar Health announced Thursday that they are teaming up to sell individual insurance on and off of the Affordable Care Act's (ACA) exchanges in 2018.

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    Why the organizations are teaming up                 

    According to Modern Healthcare, the announcement comes as many insurers are scaling back their participation on the exchanges, citing financial losses and the uncertainty surrounding efforts to repeal and replace the ACA. 

    The set-up of Cleveland Clinic and Oscar's joint venture appears mutually beneficial, Modern Healthcare reports. Cleveland Clinic, which had previously considered offering an insurance plan, will be able to test out the idea with a partner—helping eliminate some risk. And Oscar, a health care startup based in New York, which Modern Healthcare reports has had some financial losses in recent years, will be able to partner with a renowned health system.

    According to the Washington Post's "Wonkblog," Oscar uses telehealth technology to enhance the consumer experience, including an app that enables patients to communicate directly with providers. And the Cleveland Clinic, which has been focused on expanding its telehealth capabilities, initially invested in Oscar in 2014.

    Details of the collaboration

    The Cleveland Clinic and Oscar plan to begin offering the plans in five counties in northeast Ohio in January 2018, including Cuyahoga, Lake, Medina, Lorain, and Summit. According to "Wonkblog," none of those five counties are the in the group of 18 counties in the state at risk of having no insurers on the ACA's exchanges in 2018.

    Under the joint venture, Oscar will provide a member engagement platform and insurance management skills, while Cleveland Clinic will provide clinical health care services. According to the companies, the overarching aim is to curb costs and improve outcomes by coordinating care around the individual patient.

    The narrow-network plan will cover only care provided by Cleveland Clinic's network, "Wonkblog" reports. Under the plan, beneficiaries will be assigned a team of medical providers at Cleveland Clinic, including a primary care physician, physician assistants, and other health care providers. The plan member will also get access to a "concierge team" at Oscar—comprised of a nurse and three care guides—to help guide the patient through the health care system.  In addition, beneficiaries will receive 24-hour access to telehealth services.

    Cleveland Clinic and Oscar will split potential profits and losses 50-50, Modern Healthcare reports. Currently, Oscar provides coverage for about 105,000 people; the two companies anticipate a few thousand people in Ohio will enroll in the new offerings.

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    Comments from Oscar and Cleveland Clinic

    Oscar CEO and co-founder Mario Schlosser expressed confidence the joint venture will succeed, despite what other insurers consider an unstable market. "If you put a product out in the market that is less like traditional health insurance and sick-care oriented, and much more a consumer product that people want to engage with, that they like to tell their friends and family about, that pays them a dollar day to walk steps and things like that, you are going to attract ... plenty of 25- and 35-year-olds who just want to have good health care," Schlosser said.

    And while Steven Glass, CFO at Cleveland Clinic, acknowledged that Oscar has had some financial losses recently, he said his health system worked with Oscar to identify challenges and develop a plan designed for success in its Ohio market. He added, "Whatever happens with Obamacare and the exchanges, however that plays out in D.C., the individual marketplace is still going to exist, and health-care providers like the Cleveland Clinic are going to want people in that individual marketplace to have access to the Cleveland Clinic" (Johnson, "Wonkblog," Washington Post, 6/15; Livingston, Modern Healthcare, 6/15; Japsen, Forbes, 6/15; Haefner, Becker's Hospital Review, 6/15; Christ, The Plain Dealer, 6/15).

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