More Insurers Join Forces With Health Networks

Sept. 26--A patient recently came to a doctor's office to schedule a visit. But thanks to the quick thinking of Mary Solomon, a nurse "embedded" at the Scranton office, the patient was told that no appointment would be necessary because the doctor would see him right then and there.

Though Solomon, works in a doctor's office, she actually works for the patient's insurer, Geisinger Health Plan, as a case manager. With access to insurance records, she was aware that the patient, who had stopped taking his medications after his wife died, recently went to the emergency room for congestive heart failure.

"He was in serious shape," Solomon said. But by making sure the patient got in to see his doctor without delay, she was able to put him on the road to recovery -- and she probably averted a costly hospital re-admission as well.

That's what caregivers and insurers can do when they join forces, and such success stories will soon be more common in the Lehigh Valley, according to the region's two biggest health care networks, since both have agreed to partner with insurance companies.

St. Luke's University Health Network announced last month that it signed a collaborative agreement with Geisinger Health Plan, the insurance division of Danville-based Geisinger Health System. Under the deal, Geisinger will train case managers like Solomon, who will be placed in St. Luke's medical practices.

"To start with, the relationship will be based on sharing data," Geisinger Health Plan Vice President Lisa D. Hartman said. "It's much better for the patient, and it's going to save money, no question about it."

Also last month, Lehigh Valley Health Network reached a similar agreement with insurer Highmark Blue Shield.

"As an insurance company, we're data rich," while LVHN doctors have "clinical experience," said Highmark Vice President Jerry Walsh. "If you put those two together, that's very powerful."

Political imperatives and technological advances are like geological forces that forever and inexorably alter the health care landscape. Occasionally, they trigger a tectonic shift -- such as the Affordable Care Act -- that registers with the swiftness and power of a major earthquake.

By comparison, the rise of health network and insurance company partnerships is a modest tremor, but one whose impact, though less dramatic, is still noteworthy.

"This is a really interesting topic. We're pushing to do more research on this," said Eric Schneider, vice president at the Commonwealth Fund, a heath research group in New York. Much of what is known about the alliances is based on anecdotal evidence, which suggests that such arrangements are becoming more common in some markets, he said.

Traditionally, health networks and insurance companies, pitted on the opposite of the price debate, had a more adversarial relationship. The networks fought for higher reimbursements, while insurers insisted on paying less.

Walsh said Highmark still has good reason to push back against networks' proposed prices hikes, and it will continue to do so with LVHN, even as the company forges a friendlier relationship with the network on other matters. Schneider, on the other hand, isn't so sure it's that simple.

"They can basically raise prices and there's no countervailing force to that," he said. "I think that's going to be a major concern for the antitrust division of the Department of Justice."

The benefits of data sharing -- better patient care and lower costs -- are real but only partially explain what's driving health network and insurance company partnerships together, according to Schneider. He said both sides also expect to attract new customers.

As Tom Croyle, president of the Lehigh Valley Business Coalition on Healthcare, said: "Everybody is after market share."

LVHN and Highmark are gearing up to offer a new co-branded insurance plan in 2017. The Lehigh Valley Health Network Flex Blue plan will be available both through Obamacare, as the ACA's online marketplace is widely known, and through employers that choose to offer it.

Through reduced co-pays, co-insurance and deductibles, customers will be incentivized to seek care at LVHN facilities, Walsh explained.

Plans that favor narrow networks are becoming increasingly popular across the country, according to Paul Ginsburg, a health economist at the University of Southern California. He said insurance companies see them as a lower-cost and more appealing alternative to high deductible plans.

"It's a more effective way to address price," he said. "Consumers are willing to have less choice to save money."

Here's how LVHN and Highmark officials describe their approach: Not only will Highmark tell doctors about customers' previous care and medications, it will feed the information to Populytics, LVHN's data-crunching subsidiary in downtown Allentown.

Populytics, in turn, will make actuarial-like predictions on individual patients. And finally, these predictions will help doctors decide how to treat patients.

In fact, LVHN can already do this -- and it does -- for its own employees since the network is self-insured. According to Populytics CEO Gregory Kile, his company's proprietary software can predict with 90 percent accuracy what kind of care individual patients will need in the next six months.

Dr. Mark Wendling, the medical director of LVHN's Valley Preferred practice, gave a hypothetical example of how such information is used: He might learn that one of his chronically ill patients is soon likely to suffer some complication requiring a trip to the emergency room. But knowing this, he could then treat the patient differently than he might otherwise, thereby pre-empting the need for the expensive ER visit.

Such data-intensive approaches were not covered in medical school in the 1990s when he was a student, Wendling said. "The office visit I do today is much different," he said. "I would argue it's much better."

The St. Luke's-Geisinger alliance will have other consequences as well. To begin with, 10,000 St. Luke's employees and their dependents will be enrolled in Geisinger Health Plan at the start of the new year, allowing St. Luke's to save $500,000 annually, according to St. Luke's.

Additionally, St. Luke's and Geisinger will introduce a Medicare Advantage product for Medicare recipients in the Lehigh Valley. Under traditional Medicare plans, the government pays hospitals and doctors directly.

But with Medicare Advantage plans, the government pays insurance companies, which then offer Medicare recipients coverage for a wider array of services. The objective is to improve management of chronic conditions and access to services, according to St. Luke's and Geisinger.

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