Correlates and Motivations for Provider-Sponsored Health Plan Ownership in the Post-Reform Era

Abstract

The rise and fall of managed care in the 1980s and 1990s saw many hospitals and health systems in the United States enter and subsequently exit the health insurance market in the form of provider-sponsored health plans (PSHP). The passage and implementation of the legislation such as the Patient Protection and Affordable Care Act (ACA) and the Medicare Access and CHIP Reauthorization Act (MACRA) has ushered in an era of value-based reimbursement methods and a heightened focus on population health management, which has stimulated health care organizations to contemplate health plan ownership as a logical strategy. This study examined market and organizational factors associated with PSHP ownership in the post-reform era, as well as motivations for engaging in PSHP. This study used a sequential quantitative to qualitative mixed-methods design. The quantitative analysis examined 5,849 U.S. hospitals using binary logistic regression and ordinary least squares regression models for the year 2017. Ten semi-structured interviews were conducted representing eight health systems in five states. Thematic analysis was conducted and results were synthesized with quantitative findings. The results indicated that hospital and payer concentration, percentage of the state population on Medicare, income per capita, unemployment rate, presence of salaried physicians at the hospital, participation in risk-bearing arrangements, absorptive capacity score, participation in a clinically integrated network, profit-status and CBSA indicator were all significantly associated with health plan ownership at p<.05. Interviewees reinforced these findings and described PSHP as the culmination of the journey along the continuum of volume-based incentives to value-based incentives, as well as a strategy to better compete, and diversify revenue streams. Implications for policy and practice are discussed.