• When hospitals become insurers

    Anna Wilde Mathews on hospital-insurer integration in the WSJ:

    Like insurers, which are building lower-cost “narrow network” plans for the exchanges, the hospital systems are betting that consumers will be willing to accept a smaller choice of health-care providers in return for the promise of smoothly integrated care and premiums that are likely to be lower. The hospital systems plan to build their coverage around their own networks, but may fill them out with other providers as well.

    Hospital systems say their focus is on providing high-quality care, and they think that the better technology that helps them closely track patients will ensure they avoid some of the financial pitfalls of decades ago. Also, today “there is financial urgency,” said Frank Williams, chief executive of Evolent Health, which is advising many hospital systems pursuing integrated operations, including Piedmont. [Emphasis added.]

    Is there research on the extent to which provider-insurer integration of the type reported actually reduces premiums and increases quality? Yes there is, but not much, and colleagues and I have done it. As it is not yet published, I’ll write more about it another time.



    • This is an interesting area. Instinct says integration should lead to more efficient outcomes. However, here in the UK, the NHS is essentially an integrated provider-insurer. The scope of fully-funded health services provided (incl. many purely elective “mass market” treatments in priority to vital treatments for rare diseases) is unsustainable and morally questionable. The NHS is pervaded with inefficiencies, politics and weird internal incentives but I’m sure this is a result of public ownership and the consequent absence of any profit motive/customer service ethos rather than the integrated provider-insurer form per se. Interested to see your research.

    • I wonder how well these will deal with those of us who are very mobile. Will emergency rooms look at out-of-network arrivals as cash cows to be milked of every last drop? Or will we be whacked with huge fees for getting sick away from home?

      My daughter broke her leg in Massachusetts and the well-respected clinic we took her to ran up an inordinate bill with three x-rays and a CAT scan and two consults. The airline wasn’t the slightest bit helpful in changing our flights, either, despite the doctor’s note.