Health systems starting to re-embrace provider-sponsored health plans

The failure of provider-sponsored health plans (PSHPs) in the 1990s isn’t hindering health systems from reconsidering their worth, as inpatient volumes — and the revenues they generate — continue to drop. Confidence is higher now than it was 20 years ago due to the wide availability of technology to manage risk under value-based reimbursement.

In the Spring/Summer 2016 edition of Optum RISKMATTERS, experts discuss how advances in data and analytics, changes in government regulations and shifts in care delivery are supporting the resurgence of PSHPs. Health systems serious about building and maintaining a successful PSHP must carefully evaluate several areas before moving forward:

  • Capital needed to start and maintain the plan, including a rainy-day fund
  • Market competition
  • Growth strategies
  • Rules and regulations governing how PSHPs operate
  • Staff and resources to run a PSHP from end to end
  • Robust data and advanced analytics, both clinical and financial
  • Patient, provider and employer engagement strategies

There’s no single formula for a health system to follow when creating a PSHP. However, provider organizations may be well-positioned to take on this broader role because they likely have a strong sense of what benefit packages patients want. Such providers also may understand the unique needs of their local communities better than organizations with national reach.

To learn more about how provider-sponsored health plans are making a comeback and how they can be successful, read “To Health Plan or Not” in the current edition of RISKMATTERS. Download the entire magazine here to explore the idea of creating the new network of health care through trust and partnerships.


About the Authors:

erikjohnsonheadshotErik Johnson, MBA

VP for Health Management Consulting

Erik is a VP for Health Management Consulting. He has broad experience in designing population health strategies for a broad array of providers. He was most recently Senior Vice President at Avalere Health, where he ran its Healthcare Networks consulting practice and oversaw new product development. Erik assisted healthcare systems in determining how to adopt and assess accountable care and bundled payment models, and guiding overall strategy. Erik also worked with health IT companies in responding to emergent issues around EHRs and data exchange.

Erik has an BA with honors and distinction from Stanford University and an MBA from the Stanford Graduate School of Business.


jay2Jay P. Hazelrigs, ASA, MAAA

Vice President, Network & Population Health Consulting

Jay Hazelrigs is a Vice President and leads the Accountable Care Services team in the Network and Population Health Consulting division in Optum. He has worked as a health care actuary for over 20 years and consulted with multiple Fortune 500 companies throughout his career. His unique background includes consulting to government and commercial payers, providers, employers and ACOs across a multitude of business and actuarial issues.

Jay is an Associate of the Society of Actuaries and a member of the American Academy of Actuaries. He graduated from Georgia State University with a Bachelor of Business Administration degree with a concentration in Actuarial Science.

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