Executive Perspectives On Provider-Sponsored Plans

Provider-sponsored health plans (PSPs) are growing in importance. PSPs give health systems an opportunity to use health care financing as an enabler to create innovative clinical care models. Health care organizations that successfully innovate to reduce costs and improve quality should prosper under new performance-based financial models; in particular, those called for by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

Collaborations between health plans and health systems for PSPs also are growing in number. The relationships can give health systems access to health plans' expertise and deep pockets. Such collaborations have generated innovative approaches in population health, member engagement, predictive analytics, and member retention.

Examples of collaborations for PSPs include Anthem's partnership with Aurora Health Care in Wisconsin and Aetna's partnership with Texas Health Resources. These partnerships leverage the health plan's capabilities and resources, and the hospital's brand and care management skills, thereby helping to solve the challenges some health systems face in trying to build their own plans.

To better understand PSP opportunities, approaches, experiences, and potential concerns, Deloitte convened nine executives from health systems, health plans, PSPs, and other organizations to discuss what it might take to develop successful PSPs. Deloitte also interviewed four executives from health plans that have PSP partnerships to better understand the strategy behind their collaborations.

Executives agreed that more health systems are now interested in developing PSPs than in the past, and also concurred that:

• Collaborative models are attractive to both parties.
• Scale is important to be successful.
• Required health plan capabilities and competencies are usually not found inside a typical health system.
• Focus and leadership are required to align the hospital and health plan businesses.

MACRA may prove transformational in spurring innovative health system approaches in the marketplace. Organizations that improve quality and reduce costs under a PSP model are more likely to succeed under this new Medicare payment system. As the scope of MACRA expands to include other payers, innovative organizations that are generating superior outcomes may do well under multiple payment systems and payers.

Read more in: Collaboration meets innovation: Executive perspectives on provider-sponsored plans