It’s a Hospital, It’s a Health Plan, It’s Both!

Tufts Health Plan (Watertown, MA) and hospital company Hartford HealthCare (Hartford, CT) have announced a joint venture to form an insurance company, which will focus on providing those over 65 who qualify for Medicare the alternative of purchasing a Medicare Advantage plan.

The “twist” with this joint venture is that it will bring together an insurer and a hospital firm in one company and “it’s a first for Connecticut.”

Like many of the new health care collaborations sprouting up, such as Aetna-CVS and Berkshire Hathaway, Amazon and JPMorgan, the name of the game right now is using data better to try to lower costs.

Hartford is looking to Tufts Health Plan to bring “insights around closing gaps in care, identifying members who have needs they may not even be aware of and better coordination of care,” James Cardon, Hartford’s chief integration officer, told the Hartford Courant. Tufts has 1.1 million members across New Hampshire, Massachusetts, and Rhode Island.

Collaborations between health plans and providers are not unknown; however, they are in “relative infancy, and many of the approaches don’t involve as extensive as a commitment that is implied and inherent in a joint venture,” according to Tufts CEO Thomas Croswell.

A key advantage of the joint venture is that it will combine clinical data from Hartford with claims data from Tufts Health Plan, giving the partners the ability to reach out to members. Inherent in these concepts is reaching patients before they have serious health care needs.

Hartford HealthCare CEO Elliot Joseph explained the joint venture was built specifically to address both organizations’ realization that there’s room for improvement in care for patients with chronic conditions, especially in helping seniors manage their care in order to avoid hospitalizations. If reducing costs is the goal, it makes sense that Tufts and Hartford HealthCare are focusing initially on seniors, given their high use of health care services; however, such a strategy is unlikely to work for other populations.

In another example of provider-insurer consolidation, Centene Corp., a Medicaid managed care insurer and the “dominant health plan on the Affordable Care Act exchanges,” plans to buy Florida-based primary-care provider Community Medical Group.

Community Medical will boost Centene’s scale and capabilities around care delivery, and Centene will gain access to the provider’s patient population.

Community Medical Group operates 13 medical centers and two specialty centers serving more than 70,000 Medicaid, Medicare Advantage, and Affordable Care Act exchange patients in Miami-Dade County, FL. As of the end of last year, Centene had 848,000 Florida plan members, and that number is expected to increase as it grows membership in the ACA exchange in Florida.

Centene also announced recently that it has agreed to buy MHM Services, a provider of health care and staffing services to correctional facilities and government agencies, serving 330,000 people.

This strategic approach is all about controlling where plan members receive care, similar to previous deals where an insurer buys a provider group. UnitedHealth Group’s Optum subsidiary bought DaVita’s medical group and acquired Surgical Care Affiliates last year. Humana also bought home healthcare provider Kindred Healthcare last year.

The health care system in the U.S. is changing rapidly. With less direction (or interference, depending on your point of view) from the federal government, health plans and provider groups are leading the way in creating new approaches for care delivery. Whether payers, including employers and consumers are better off, is yet to be seen.