March 6, 2020

Why more insurers are wading into the provider market

Daily Briefing

    Major health insurers are increasingly buying up health care clinics and establishing plans that encourage their members to go to those sites for care—raising concerns for hospitals and physician groups, many of which are aiming to compete for the same patients, Anna Wilde Mathews reports for the Wall Street Journal.

    Who are the innovative disruptors in care delivery?

    How insurers are trying to gain a foothold in the provider space

    Health insurers can deploy a variety of tactics to encourage their members to seek care at their own clinics, rather than those owned by other stakeholders.

    For instance, several Aetna plans this year have eliminated copayments for visits to the MinuteClinic, the retail clinic run by CVS, which was recently acquired Aetna. However, according to Wilde Mathews, members still face copays for visits to other retail clinics.

    Similarly, Blue Cross & Blue Shield of Texas this year started offering a plan that provides no-cost primary care visits at the clinics it has opened with partner company Sanitas. The plan also allows members to visit independent providers, but members have copays for those services, Wilde Mathews reports.

    Florida Blue also has plans that emphasize no-cost visits to primary care clinics owned by a joint venture that involves the company's corporate parent.

    And in the Los Angeles area, UnitedHealth Group's insurance arm, UnitedHealthcare, has launched a health plan that centers on doctors who work for UnitedHealth Group's Optum. Optum in recent years has added a range of provider offerings to its portfolio, including physician practices, surgery centers and urgent-care clinics, Wilde Mathews reports. (The Daily Briefing is published by Advisory Board, a division of Optum.)

    Why some hospitals are worried about insurers' moves

    Wilde Mathews writes that "deals like the CVS-Aetna merger and Optum's provider acquisitions have created integrated health-care giants on a new scale," potentially posing a business challenge to other health care providers.

    Some hospitals worry that insurer-owned plans might not refer patients to their health systems for imaging scans and specialist procedures, which could damage an important part of hospitals' business, Wilde Mathews reports.

    But insurers say their plans do not aim to exclude external providers. For instance, Florida Blue EVP Chuck Divita said the clinics the Florida Blue's plans work with would aim to refer patients to providers with the best outcomes.

    Rob Falkenberg, chief executive of UnitedHealthcare's California operation, said UnitedHealthcare's new Harmony plan may rely on both Optum and non-Optum doctors, and both provider groups will be treated equally.

    Why insurer-owned clinics still need other providers

    But while insurers' steps may pose financial challenges to providers, they aren't equipped to offer the full range of health care services that hospitals and other industry players provide, Wilde Mathews reports.

    Sam Glick, a partner with consulting firm Oliver Wyman, a unit of Marsh & McLennan Cos., said, "Health plans want to exert pressure on provider systems, but they don't have a product without providers in it, so they're moving carefully."

    Another complication is that many employers aren't interested in doing business with health plans that maintain narrow networks—which typically is the case for plans anchored to insurer-owned clinics. According to a 2019 Kaiser Family Foundation (KFF) survey, 39% of employers would not narrow their network to achieve cost savings.

    On the other hand, individual purchasers—including those shopping on the Affordable Care Act exchanges or those enrolled in Medicare Advantage, appear more receptive to plans with fewer choices, according to KFF EVP Gary Claxton. "They're making an individual choice of plan, and they're not shopping for 5,000 different people in different places," he said (Wilde Mathews, Wall Street Journal, 2/23; Rappleye, Becker's Hospital Review, 2/21; Blue Cross and Blue Shield of Texas release, 10/4/19).

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