The percentage of U.S. hospitals owning or jointly owning a health plan grew from 18.3% in 2018 to 27.2% in 2023, leaders from Boston-based Massachusetts General Hospital said in a research letter published in JAMA.
Here is what to know:
1. This shift to a “payvider” comes amid reimbursement shifts from volume-based to value-based models, which sees hospitals facing increased pressure to assume financial risk amid ensuring clinical quality and sustainability, the letter, published May 28, said.
2. Among healthcare organizations, 90% reported having at least one provider temporarily unable to bill in the previous year because of payer enrollment issues, according to a June 17 report from Assured, a provider network management platform. This resulted in a median of more than $100,000 in revenue delayed for each enrollment-related incident.
3. Academic medical centers have the highest growth in payvider models, with 35.2% of hospitals affiliated with medical schools operating a provider-sponsored health plan as of 2023, compared to 22.4% of hospitals without a medical school affiliation, the letter authors said.
4. Provider-sponsored health plans may create a “dual-agency” conflict, in which physicians must balance individual patient care with the broader organizational responsibility of healthcare spending. These tensions may arise in decisions around discharge timing, post-acute placement and observation versus inpatient status, according to the research letter.
5. In recent years, many health system-owned insurance plans have been scaling back the scope of their coverage. A handful of health plans planned to wind down operations leading up to 2026, including plans run by Urbana, Ill.-based Carle Health and Ann Arbor-based Michigan Medicine.
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