Ascension Health, the St. Louis-based not-for-profit that includes one of the largest U.S. health systems, sees self-insured employers as the market for its growing health insurance arm.
Ascension's acquisition last December of U.S. Health and Life insurance Co., a Michigan insurer with licenses in 20 states, positioned the system to compete for the business of self-insured employers in markets across 23 states and the District of Columbia, said Anthony Tersigni, Ascension's CEO.
“If there are self-insured employers in those communities we serve, we want to have the capability to develop products for them so that we're keeping their employees, who happen to live in our communities, well,” he said.
The market for insurers to administer employers' self-funded insurance is large and growing. Nearly two-thirds of workers with health insurance through a job are in plans that are fully or partially self-funded, up from 44% in 1999, data from an annual survey by the Kaiser Family Foundation show.
Ascension is a growing and increasingly diverse not-for-profit, with a dozen subsidiaries and a health system that includes 131 hospitals and 30 senior-care facilities. Ascension recently announced a home health joint venture. It also owns or partially owns another five health insurance companies.
Insurance companies face increasing competition from health systems entering the market through acquisitions—as Ascension, Catholic Health Initiatives and Partners HealthCare have done—or by launching plans from scratch, a strategy used by North Shore-LIJ Health System in New York. New entrants join a small group of health systems and medical groups that already own health plans, such as Kaiser Permanente and Geisinger Health System.
Ascension is not expected to begin marketing its product soon, Tersigni said. First, the system will work with U.S. Health and Life Insurance, and its care-management subsidiary MissionPoint Health Partners, to develop benefits and gain experience managing the quality and cost of care for its own roughly 300,000 employees and their dependents.
“We believe when we do that, we will be positioned to go out to self-insured employers and say, 'Here's what we've been able to do for our employees, we can do the same thing for your employees,' ” Tersigni said. “You can't go out and sell something unless there's a proven track record.”
Ascension will introduce its new benefits to employees in January and will have results in the next 18 months, he said.
“I would suspect our 300,000 employees and dependents (are) a microcosm of what you're seeing across the country in terms of health and health needs,” Tersigni said.
Ascension will continue to develop alternatives to the existing model of healthcare delivery and financing as the new insurance business grows, he said.
“We've canvassed the universe,” Tersigni said. “We've looked at every startup company, every existing company, and we're not convinced that anyone has the right answer. Nor do we, at this point.”
However, he does not consider Ascension a rival to the nation's largest insurers. “You're never going to see Ascension try to become a United, try to become a Humana, try to become an Aetna,” he said. “That's not our interest.”