Maybe health insurance should be handled directly by IDN’s and Health Systems

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Maybe health insurance should be handled directly by IDN’s and Health Systems

With recent news about health insurance companies pulling out of the Health Exchange under the Affordable Care Act maybe it’s time to get creative and look at new avenues for cost effective health insurance coverage.

The idea behind the health exchange was to reduce insurance cost by driving competition.  The health exchange was going to provide affordable health insurance but the cost of healthcare outweighs the demand within subsidies that were given out to low income consumers causing insurance providers to lose money and pull out of the exchange all together.  This has left consumers without insurance and is driving the cost of premiums up for those who are not part of the exchange.

Some health systems have created their own insurance companies to provide insurance to patients within their networks in order to drive consumers to utilize services within their hospitals.  With this new movement maybe it’s time for health insurance to be totally housed by those who can dictate the cost of care they provide?

Consultant presenting insurance concept and risk management

Health systems are already utilizing this formula with consolidation in the industry. Health systems have actively been acquiring stand-alone hospitals for years.  This market consolidation allows health systems to streamline service while minimizing exposure in operational expense.

The following would be an example of how this model might work in the Cleveland Market:

The Cleveland Clinic and UH are the two big players in NE Ohio and hospital consolidation has narrowed consumer choice down to one of these two organizations.  If both health systems provided their own insurance plan, it would provide direct competition in a centralized market place where consumers could look at services offered, cost of services provided and cost of insurance to cover services provided.  Both organizations would be forced to drive cost savings in all these areas in order to directly compete with one another.   Smaller health systems and stand-alone hospitals would be able to negotiate with these providers to be included in their insurance plans.

Yes this is a broad overview of the topic and there are numerous variables that would need to be taken into account but direct competition in a regional market place would drive value to the consumer in the plans being offered as well as its cost.

Report confirms gradual growth in hospital-owned health plans