A number of healthcare providers and insurance companies are merging. One previously reported example is the CVS purchase of Aetna (see: Merged CVS and Aetna Will Move Toward a Community-Based Healthcare Model; Analytics May Be the Secret Sauce to Propel CVS-Aetna Forward). Now comes news that Partners HealthCare will self-insure its 100,000 employees (see: Partners HealthCare to Self-Insure 100K Employees). Below is an excerpt from the relevant article:
Partners HealthCare has announced it will self-insure 100,000 of its employees, transitioning coverage from BlueCross BlueShield of Massachusetts to its own Neighborhood Health Plan.... Partners HealthCare chief of human resources...[said] that the change is an effort to control health plan costs and reduce out-of-pocket spending for employees. Currently, Partners HealthCare spends roughly $830 million annually on employee health benefits....Partners expects to save between $10 to $15 million a year by transitioning employees to Neighborhood Health Plan coverage. Partners informed employees that their benefits would not change under the move to Neighborhood Health Plan. Partners will also invest in additional care coordination efforts, while offering enhanced wellness benefits, smoking cessation programs, and related programs for employees.....The move now nearly doubles Neighborhood Health Plan’s commercial membership. Before the transition, Neighborhood Health Plan covered roughly 32,000 Medicaid beneficiaries and 100,000 commercial members. The commercial membership of BCBS of Massachusetts will drop from 2.8 to 2.7 million beneficiaries as Partners begins to transition employees to the new health plan.
On one level, the merger of healthcare providers with insurance companies makes sense. CVS operates MinuteClinics, walk-in retail clinics that are providing an increasing number of visits at the entry level of care. Health insurance companies are also purchasing provider networks (see: UnitedHealth Group Soon to Be Largest Employer of Doctors in the US). The article above reports that Partners HealthCare, one of the most prestigious provider organizations in the country, will now provide health insurance to its 100,000 employees. My recurrent complaint about hospitals and physicians over the years has been that they favor treating disease rather than promoting wellness. Health insurance companies are more profitable if policy holder refrain from using services. Partners may thus now have a powerful motive to promote wellness. The article above provides other reasons for Partners to provide health insurance for its large number of employees: "Partners will...invest in additional care coordination efforts, while offering enhanced wellness benefits, smoking cessation programs, and related programs for employees."
I have blogged ad nauseum about the need for increased attention to wellness and preventive medicine programs like smoking cessation (see, for example: A New Term, Scientific Wellness, Used to Describe Direction of Healthcare). However, let's address the issue of how improved care coordination programs can save money and benefit patients. There's an old adage that a patient with a complex disease needs to keep track of which specialists he has had appointments with and their recommendations because the hospital that employs them won't readily know. This example highlights the importance of care coordination. Below is a good definition of it from NEJM Catalyst (see: What Is Care Coordination?):
Care coordination synchronizes the delivery of a patient’s health care from multiple providers and specialists. The goals of coordinated care are to improve health outcomes by ensuring that care from disparate providers is not delivered in silos, and to help reduce health care costs by eliminating redundant tests and procedures.
Why exactly is enhanced care coordination an important goal for Partners as the corporation provides health insurance for its employees? The quick answer is that it reduces the cost of care by avoiding redundant ordering of procedures and by allowing health professionals to work more efficiently by leveraging their inputs for diagnosis and treatment into an integrated and timely plan. I have no idea to what extent efficient care coordination will reduce the cost of care for Partners but I suspect the it's at least by 25% and perhaps as much as 50%.