Hospitals Confronting Health Insurers on Their Own Turf

Hospital systems across the country are increasingly confronting health insurers on their turf. The bitter feud between the UPMC Health System and Highmark Blue Cross Blue Shield in western Pennsylvania gives us a pretty good idea what this might look like. And it isn’t pretty.

The UPMC Health Plan has competed with Highmark now for two decades. Though it hardly seems possible, the white-hot rivalry grows more intense every year, as the UPMC Health System has used their plan to become ever more dominant in their region. The latest twist in this battle to the death has Highmark entering the market as a healthcare system, having gained regulatory approval to take over the West Penn Allegheny Health System.

Now a brash start-up company in northern Virginia is helping a growing number of large health systems replicate the success of UPMC. The company, Evolent Health, is helping them build their own health plans from scratch. Growing tired of health insurers squeezing their financial health, these systems have dreams of turning the tables and putting health insurers on the ropes.

Some of the impetus comes from sweeping changes in healthcare delivery and payment that the Affordable Care Act is bringing to the marketplace. Provisions to encourage accountable care organizations (ACOs) prompted some health systems to look for innovative alternatives to splitting the money with health insurers. Says Paul Ginsburg, President of the Center for Studying Health System Change:

Some hospitals are saying they don’t see much upside in the ACO model. Instead, they’re saying, let’s create our own plan where we have a much greater upside if we do a good job. That’s the big change, this big opportunity for plans to be built around a health system, that did not exist before. 

We can’t help but wonder, as these titans clash, who will attend to the interests of the patients? 

Click here to read more in the Washington Post and here to read more in the Wall Street Journal.

Confrontation, photograph © h.koppdelaney / flickr

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