Cleveland Clinic more 'accessible' with insurance products

Cleveland Clinic is diving into the insurance market.

Last week, it announced a partnership with Humana Inc. (NYSE: HUM) to create two new $0 premium Medicare Advantage health plans in Cuyahoga County.

It is the health system's second co-branded insurance product in recent months. In June, the Clinic announced it was making its first entrance into the insurance market with a product bearing its name in collaboration with New York City-based Oscar Health.

"I think the industry as a whole has come to the conclusion that one of the most effective ways to create a sustainable health care industry in the future is to take a more comprehensive approach to patient care, to care management," said Kevin Sears, executive director of Cleveland Clinic Market & Network Services. "And these kinds of partnerships between insurance companies and provider systems really bring to bear a broad array of clinical and business and patient engagement capabilities to get the best result."

The Clinic has flirted with entering the insurance business for years, though branding plans with existing insurers isn't as risky as going forward on its own. Over the last few years, for example, provider-sponsored plans have continued to struggle and few have reached profitability, according to a June 2017 report from the Robert Wood Johnson Foundation. For example, HealthSpan, the former Kaiser Permanente plan and clinics in Northeast Ohio that had been acquired by an auxiliary of Cincinnati-based Mercy Health, went belly up last year.

Clinic officials say the system's current health insurance strategy is designed to improve health care outcomes, lower costs and enhance patient experiences. Both partnerships offer narrow-network products, meaning the plans don't include the entire market of providers and facilities, but rather Cleveland Clinic docs and hospitals. Narrow networks aren't a new phenomenon in the health care space, though, in this case, the Clinic prefers the term high-performance network.

Also in both partnerships, the Clinic shares financial accountability, something Oscar officials said was important to them. Typically, with risk-based contracting, health care providers are rewarded financially by insurers for keeping select patient populations healthy and out of the hospital.

That's the inverse of the traditional fee-for-service mode. Sears said he couldn't discuss the particulars of the financial arrangement, but said both Oscar and the Clinic are "accountable financially for the performance of this product."

Joel Klein, Oscar Health's chief policy and strategy officer, said, "By deeply sharing risk with us, they're sort of engaging in a way that is really important. They're not just talking a game; they're participating in the game."

The "Humana Cleveland Clinic Preferred Medicare Plans" will be offered during this year's Medicare Advantage and Prescription Drug Plan enrollment period, with plan coverage beginning Jan. 1, 2018.

Sears said the intent in this partnership is similar to that in the Oscar collaboration.

Insurance companies do benefit design, network management and claims administration well. Provider systems bring the clinical expertise.

"And when we can bring those two together in the right construct, we get the best that both have to offer," he said. "We put it together, and that ends up with a better product and a better result for health insurance members and our patients.

Both Humana plans — a Medicare Advantage Health Maintenance Organization (HMO) plan for those with Medicare, and a Medicare Advantage Dual-Eligible Special Needs (D-SNP) plan for individuals covered by both Medicare and Medicaid — offer a $0 monthly premium, $0 primary care physician office visit copay, $0 copay for a 30-day supply of Tier-1 prescription drugs and require no referrals to see in-network specialists. The plans give members access to the Clinic's physicians, specialties and facilities, as well as independent physicians who are part of the Cleveland Clinic Quality Alliance.

Medicare Advantage plans are privately run versions of the federally funded health care program for seniors. Many insurers have reported significant membership gains in the plans over the last few years as baby boomers age into the Medicare program. Also, Modern Healthcare, a sister publication of Crain's Cleveland Business, reported in April that payment rates for insurers that sell Advantage plans will rise by 0.45% on average for 2018 — a better-than-expected pay bump.

As for what's next in the Clinic's entrance into co-branded insurance collaborations, Sears said the Clinic continues to pursue partnerships with payers.

"And we continue to look for the right payer partners and the right ways to make sure that we're available in the marketplace to the citizens of Ohio," he said. "And so we will continue to look for the right opportunities to create these partnerships."

"Cleveland Clinic more 'accessible' with insurance products" originally appeared in Crain's Cleveland Business.