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Kaiser’s latest employer benefits survey offers some interesting data on the adoption of narrow (or high performance) network products. See chart below: Couple of observations: Overall adoption at the firm level appears to stand at almost 20%. The data probably under-represents the share of firms with a narrow network product: firms which have narrow networks in their second or third most common plan would not appear in this data. However, the share of lives in a narrow network product is probably lower: I would think narrow network products are adopted more frequently among employers… Read More

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Why would a health plan want to buy an exchange? Isn’t the only synergy if the owning plan tilts the exchange in their products favor? And won’t that damage the value proposition of the exchange for buyers and see them flock elsewhere? To understand the Bloom Health acquisition, it is important to recognize that the private health insurance exchange (PHIX) space is quite fluid, consisting of three or four distinct market opportunities. (The fourth — capabilities resell — might not really qualify as a PHIX specific opportunity, it is more a readily accessible adjacency):… Read More

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The Stewards-Tufts deal announced today will create a narrow network insurance product targeting the small group segment. As reported, members covered by the plan must get all routine care from Steward providers except for complicated procedures and when authorized by a Steward physician. In return, premiums should be 15-30% below other products. Tufts and Steward will share the premiums. Some local market context: Steward Health Care is owned by Cerberus Capital Management is the only major for profit system in the market. The deal follows at the heels of a move by the leading provider system (Partner’s) to… Read More

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Part of the theory of ACO value creation is trading off more primary care (resulting in better care coordination, fewer missed time bombs, and use of lower cost care options) against reduced use of specialists, ERs and hospitals (few stays, shorter stays). Early results seem to describe substantial promise (although not for everyone who tries the model). Let’s assume this promise will be realized in broader roll-out for the purposes of this post. One fear that is ACOs will drain volume away from unaffiliated medical specialists and hospitals, leading to a large capacity overhang and sharply weaker economics. Indeed,… Read More

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A few weeks ago, UPMC announced an agreement among nine area systems to spend $4M over the next two years to launch a health information exchange called ClinicalConnect. Reportedly, Highmark (and presumably the West Penn Allegheny hospital system it is in the process of purchasing) requested to be a part of the initiative but was refused. Building electronic connections across hospitals – particularly between community systems (such as the non-UPMC participants in ClinicalConnect) and tertiary centers such as the UPMC facilities – helps make transitioning patients easier by making full patient records readily available across settings. All else being… Read More