Provider-sponsored health plans ill-equipped to compete in insurance markets
With even experienced health insurers struggling to get it right when it comes to their offering of Affordable Care Act plans, multiple provider-sponsored health plans are doomed to fail, argues a Health Affairs blog post.
Provider-led healthcare networks are not equipped to function like insurance companies, and they don't have the expertise and experience to assess population health risks and costs, nor to accurately price health insurance products, argues surgeon and lawyer Joel Zinberg, M.D., a visiting scholar at the American Enterprise Institute. So the effort to consolidate providers and make them into insurers is a "prescription for disaster," he writes.
Zinberg says with UnitedHealth Group, the country's largest health insurer, having trouble providing ACA-compliant plans, it will be tough for provider-led health plans not to run into financial difficulty. UnitedHealth recently announced it is losing money on the ACA marketplaces and may get out of the exchanges in 2017.
The ACA is driving healthcare providers to combine into large health systems and to take on risk, Zinberg writes. More and more hospitals are offering their own health plans, but as FierceHealhPayer previously reported, success may hinge on the timing of the launch. However, Zinberg compares these provider-led health plans to the large financial institutions that required a government bailout when the economy collapsed in 2007-2008. He wonders if these large provider-led healthcare networks will be too big for the government to allow to fail when they run into financial disaster, which could leave people without medical care.
"Government policies that encourage provider consolidation and risk-bearing have not delivered their promised benefits and should end before the inevitable network failures occur," he concluded.
To learn more:
- read the blog post
Hospital-sponsored health plans: Why now may be the right time to launch
Provider-sponsored plans: Financial success may drive growth
Provider-led health plans: The future of healthcare reform?
UnitedHealth's exchange exit threat: What it means
Provider-led health plans are still rare, but a growing number on insurance marketplaces
More hospitals interested in launching health plans
Hospitals as insurers: Competition, costs, and considerations [Special Report]