Flash back a few decades and health insurers looked a lot different. Once viewed as mere claims processors for employer-sponsored plans, health insurance companies in recent years have picked up a growing number of patients who receive benefits from public health programs, including Medicare and Medicaid. For some insurance companies, these taxpayer-funded programs have become their bread and butter.
The company that would form if Centene Corp. and WellCare Health Plans are combined as planned in a deal announced last week is just one example of how the health insurance business continues to change. Much of the attraction of buying WellCare is its Medicare Advantage experience.
The growing dependence on government programs has necessitated a change in how insurers operate. To manage these new and complex patients, they’ve made investments in capabilities like care coordination and programs to address social and environmental factors that affect a person’s health. And, prompted by the increasing cost of healthcare, they’ve had to learn to operate on tight budgets, often requiring them to form close relationships with clinicians under value-based payment arrangements.
“No doubt … you’re seeing some type of slope of migration from commercial to government, though there are varying levels of the speed of that trend,” said Brandon Fryar, president of Albuquerque-based Presbyterian Health Plan, which has a Medicaid-heavy membership. “You have to do things lean and mean. You have to be creative. You have to be innovative. We start a lot of our value-based programs in the government business” before exporting them to the commercial side.