Provider-owned insurer UPMC Health Plan and Reading Health System on Monday said they are forming a joint venture to offer health insurance to employers and individuals in southeastern Pennsylvania.
Pittsburgh-based UPMC Heath Plan and West Reading, Pa.-based Reading Health will introduce a range of insurance options throughout 2017, including Medicare Advantage, Medicaid, individual, fully insured and self-insured group, special needs and children's health insurance plans. UPMC Health Plan will begin offering Medicare Advantage in the area with the open enrollment period that wraps up Dec. 7 and has offered Medicaid there for the past couple of years.
Starting Jan. 1, UPMC Health Plan will also provide third-party administrator and flexible spending account administration services for Reading Health's employee benefit plan serving 11,000 employees, according to the announcement.
In the 50-50 partnership, UPMC Health Plan will handle the administrative and claims processing, while Reading Health will provide the integrated provider network in Berks County, Pa., and beyond. The two are focusing on improving population health through value-based payment models.
By partnering with an insurer, “we have more opportunity to manage cost, quality and access, than being simply a provider and being dependent on payers to manage the care across the continuum and the total cost,” Reading Health President and CEO Clint Matthews said Monday.
Sandy McAnallen, UPMC Health Plan's senior vice president of clinical affairs and quality, said the venture provides an opportunity to offer care that's better tailored to the community.
Reading Health is “acutely aware of what their community needs are,” she said. “What we do together as a payer-provider is we develop benefit plans and clinical strategies that we'll do collectively to meet the needs of the community.”
The venture is the latest in a series of insurer-provider partnerships formed this year by health plans and systems grappling with how to lower costs and improve the outcomes of the patients they serve. Hartford, Conn.-based Aetna, for example, launched a venture with Texas Health Resources in May, and Indianapolis-based Anthem struck a partnership with Aurora Health Care in Milwaukee in April.
In such partnerships, health plans typically offer incentives to drive patients to the health system's narrow network of providers with the promise of higher quality and lower costs. Patients who choose to seek care outside of the network pay most or all of the cost of care out of pocket.