Hospital-Owned Health Plans Continue to Grow

Hospitals and health systems with their own health insurance plans now cover 15.3 million people


Hospitals and health systems with their own health insurance plans grew 6% from 2010 to 2014 and now cover 15.3 million people, according to a McKinsey report. Most of the recent growth in provider-owned health plans occurred in Medicaid plans. Roughly 57% of members in provider-owned health plans were on a Medicaid plan, compared to 32% in commercial employer plans.

When health systems own their own plans, they both provide care and insurance directly to patients, taking on direct financial risk for those patients’ care.  “It’s clear hospitals view owning a health plan as a way to build their population health programs by combining medical claims and clinical data. A health plan also allows hospitals to control more of the premium dollar,” reports Modern Healthcare. Still, provider-owned plans have their own set of financial challenges. About 45% of the analyzed plans had a negative margin in at least one of the past three years.

To help healthcare organizations manage their own insurance plans, Epic provides Tapestry which allows them to track enrollment, authorize services, collect payments, pay claims and capitations—all using the same integrated system they use to provide patient care.