Health plan-owned PCP clinics steer members to lower-cost sites-of-service

• Capitalizing on recent massive deals, some of the nation’s largest health insurers are steering patients toward clinics they now own, controlling both delivery and payment for healthcare, according to The Wall Street Journal.
• The impact of this trend will vary by market based on the number of full risk lives, the extent of the plans’ physical and virtual provider assets and how consolidated the acute care market is, according to HFMA’s Chad Mulvany.
• HFMA’s Value Project research provides case studies illustrating how organizations have developed the skills and capabilities necessary to improve the value of the care they deliver to patients and other care purchasers.

The Wall Street Journal is (finally) reporting that, “Some of the largest health insurers are capitalizing on recent massive deals by steering patients toward clinics they now own, controlling both delivery and payment for health care. The trend creates worries for rival doctor groups and hospital companies that have invested deeply in buying up physician practices, which now increasingly compete against offerings from insurers. UnitedHealth Group Inc.’s insurance unit is offering a plan in the Los Angeles area built around doctors who work for its Optum arm, which has acquired a sprawling network of doctor practices, surgery centers and urgent-care clinics. The company says it is working to offer similar designs in other markets, though they might also involve non-Optum doctors.”

“At Aetna Inc., which was acquired by CVS Health Corp., many insurance plans this year have dropped co-payments for members if they go to the drugstore chain’s MinuteClinics,” the Journal reported. “Going to other retail clinics would generally require a co-pay,” the Journal article continued. “CVS says the free MinuteClinic visits are to benefit Aetna members, and not aimed at bolstering the drugstore chain’s customer traffic. Blue Cross & Blue Shield of Texas launched a plan this year that includes free primary-care visits at clinics it recently opened with a partner company in the Houston and Dallas areas. It priced the coverage 12% to 18% below a different product it offers statewide. The new plan includes some independent doctors and clinics, but members who use them would have a co-pay for primary-care visits. Hospitals rely on doctors to direct patients to them for such services—one reason they have bought up physician practices. Insurer-owned clinics might refer patients away from certain hospital systems, cutting off important revenue.”

For good measure, let’s not forget about Humana’s recent plans to expand their footprint of employed physicians as well.

Takeaway

This is a trend we’ve been following for the last couple of years. The impact will vary by market based on the number of full-risk lives (MA, Medicaid managed care, fully insured – individual market and small employers), the extent of the plan’s provider assets (both physical and virtual) and how consolidated the acute-care market is.

If I’m a provider in a market where one of these plans has a significant number of full-risk lives, a large local care delivery footprint and relatively fragmented facilities market, this is probably the thing that keeps me up at night because the plans are going to start, if they haven’t already, steering patients to their care delivery assets for the services they provide and to preferred provider partners (identified based on the plan’s warehouse of claims data) for the more complex services the plans can’t provide. As evidence of this, we’ve already seen UnitedHealthcare institute prior authorization requirements that are intended to route appropriate surgeries into the freestanding setting (where UHC owns ASCs) for fully insured plans.

And this week, Kaiser Health News reported that UHC is dropping community physicians from its Medicaid managed care networks in New Jersey and directing members to providers employed by Optum. My guess is their actions in New Jersey are a trial balloon to see how much pushback they get from members and regulators. If it’s relatively uncontroversial, I would expect to see it rollout nationwide and expand to other lines of business.

As plans winnow down their referral networks to increase their “keepage,” it’s increasingly important for health systems to partner with them for the services they don’t have the capabilities to provide. In more competitive markets, plans will, either explicitly or implicitly, be able to tier their networks using internal claims data to identify more efficient providers. This means that hospitals and health systems will need to be able to deliver high-quality outcomes in a cost-efficient manner for a 90-day episode of care. They will also need to be able to coordinate the patient’s care with the health plan’s physicians.

HFMA’s Value Project research provides case studies illustrating how organizations have developed the skills and capabilities necessary to do this.