Five Lessons on Launching a Provider-Sponsored Health Plan

Kai Tsai and James Smith, HFMA

Interest in launching a provider-sponsored health plan (PSHP) has waxed and waned among U.S. health systems in recent years. By 2017, more than 100 health systems provided coverage to about 18 million members through PSHPs. It seemed that PSHPs might become the new normal, altering health systems strategies and enabling them to capture market share. Yet struggles to grow membership profitably caused excitement to dim for many health systems.

Today, however, PSHP interest has been rekindled in part by health systems’ growing discontent with alternative “payer-provider partnerships,” along with the surge in Medicare Advantage, industry consolidation, and a need to maintain networks among increased competition. A recent Guidehouse risk-readiness survey also finds emerging interest in PSHPs:

  • Among provider leaders surveyed, 72% plan to assume additional risk, including sponsoring a health plan, in the next one to three years.
  • One-in-five respondents say they plan to assume risk by launching a PSHP.
  • One quarter of respondents are already part of a PSHP.

Health systems that have successfully launched PSHPs invariably have already addressed capabilities and competencies needed to start a plan. Guidehouse’s Kai Tsai and James Smith offer lessons learned from PSHP leaders from four health systems – Sentara Healthcare, Presbyterian Healthcare Services, Geisinger Health, and Intermountain Healthcare – that are realizing real benefits from their PSHP strategies.

Download: 5 Lessons on Launching a Provider-Sponsored Health Plan
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