I recently posted a note in which I expressed skepticism about whether hospital executives would embrace e-health as a means to encourage patient engagement with a health system. My opinion was based on that fact that such executives historically seem to have had little appetite for preventive care because it was not remunerative (see: Facilitating Engagement of Consumers using E-Health Tools Like Twitter). I subsequently came across an article about the joint venture between Anthem and Aurora Health Care. Executives of the two organizations noted in a press release that health plans and providers, traditionally adversaries, are now finding that they need to work together (see: Anthem hatches another hospital joint venture, this time in Wisconsin). Below is an excerpt from the article:
Roughly 18 months after Anthem rocked the healthcare business community with a new provider-insurance alliance in California, the health insurer has formulated another similar project. Anthem and Aurora Health Care will co-own a new health insurance company. Anthem's Wisconsin subsidiary and Aurora, a 15-hospital system based in Milwaukee, will each own 50% of Wisconsin Collaborative Insurance Co., a newly licensed insurer. The joint venture somewhat resembles Vivify the health insurance product created in September 2014 by Anthem's California subsidiary and seven Southern California health systems, including academic medical centers Cedars-Sinai and UCLA. The latest joint venture is further evidence that health plans and providers, traditionally adversaries, are finding that they need to work together to adapt to the delivery system reforms baked into the Affordable Care Act. Organizations are looking for ways to slow healthcare spending, improve clinical quality and patient satisfaction, and reward hospitals and doctors that do both. While efforts like Anthem and Aurora's company offer fresh takes on the country's healthcare cost and quality problems, executives still have to prove their ideas lead to real-world results....The Wisconsin Collaborative Insurance Co. will offer a commercial health plan called Well Priority to fully insured and self-insured employers.
Here's a quote from another article that presented the advantages of this new joint venture (see: Anthem and Aurora form joint venture insurance company):
...John Foley, Aurora’s senior vice president of business development and president of the new company, and Larry Schreiber, president of Anthem’s Empire BlueCross BlueShield health plan and the new company’s CEO, outlined the philosophy behind the joint venture.“Today most of our care is sick-care,” Foley said....[We] seek to turn this around by combining Aurora’s delivery system and Anthem’s expertise. By integrating clinical and claims data, professionals will identify gaps in care. This will help WCIC better manage populations around their health.”In other words, the company will focus on patient wellness and preventative care instead of the traditional focus on acute care for sick patients. In theory, the strategy could reduce the number of claims filed with the insurance company, thereby lowering rates.
There is no question that an emphasis on patient wellness and preventative care can reduce insurance claims and therefore the cost of insurance (see: Cleveland Clinic Lowers Health Insurance Costs with Preventive Medicine). In theory, this makes sense as a rationale for the joint venture. There are two reasons why I think this stated goal may be merely public relations fluff to justify the merger and to make more money the only fashioned way: generating billable services from the merged and larger organization:
- I don't view provider health systems or health insurance plans as particularly flexible or innovative organizations. Greater emphasis on preventive medicine will require such ingenuity. I will be interested in watching whether this new joint venture can move in a new and somewhat radical direction.
- There is no question that preventive medicine can reduce the number and size of claims filed. This will help the insurance arm of the new joint venture but reduce the earnings of the provider arm, Aurora. This would seem to inevitably lead to friction between these two units in terms of how to conduct their business and perhaps a breakup of the joint venture.