Kevin Lofton, CEO of Catholic Health Initiatives, says his health system's entry into the insurance market has complicated its negotiations with insurers.
The big not-for-profit hospital operator got a license to operate a health plan in Nebraska. It also holds insurance licenses in six other states. Last fall, Blue Cross and Blue Shield of Nebraska, that state's largest insurer, canceled CHI's provider contract. “We don't know for sure it's because we entered the market and got a license approved, but the fact is we're in a pretty rough, intense negotiation with them in terms of the network,” he said.
In markets across the U.S., health systems and medical groups increasingly are competing against insurers to enroll employer groups and individual consumers in their health plans. Providers are eyeing the insurance market because they are entering global budget contracts and figure they might as well capture savings for themselves from their more efficient care delivery. But launching their own plans may also strain negotiations with insurers over rates and networks, said Lofton and other health system leaders at the annual meeting of the American College of Health Care Executives in Chicago.
“You know, it really shouldn't,” Lofton said.
A Nebraska Blues spokeswoman declined an interview request. The insurer previously said the CHI contract was cancelled because of high costs at CHI's Alegent Creighton Health. “While other providers have worked with us to reduce or hold the line on costs, Alegent Creighton providers, in particular, cost significantly more than others in Omaha—and they continue to ask for annual increases,” Lee Handke, a senior vice president for the insurer, said in a news release last year.