Environmental and organizational correlates and motivations for provider-sponsored health plan ownership in the post-reform era.

Abstract

The 1980s to 1990s saw many health systems in the United States enter and exit the insurance market in the form of provider-sponsored health plans (PSHPs). Reforms and value-based reimbursement methods have stimulated health care organizations to reconsider PSHP as a logical strategy. The aim of this study was to examine market and organizational factors associated with PSHP ownership and motivations for engaging in PSHP after health care reforms. The resource dependence theory was used as a theoretical lens. A sequential quantitative to qualitative mixed-methods design was used. The quantitative analysis examined data for 5,849 U.S. hospitals. Results were synthesized with qualitative findings from 10 semistructured interviews representing eight health systems in five states. Organizational and environmental characteristics were significantly associated with PSHP ownership. Hospital and payer concentration, Medicare penetration, income, unemployment rate, government, and for-profit and metro area hospitals were associated with a lower likelihood of PSHP ownership. Salaried physician arrangements, clinically integrated network membership and adoption of other risk-bearing arrangements were associated with higher odds of PSHP ownership. Interviewees described PSHP as the culmination of the journey to value-based care and as a strategy to improve patient care, compete, and diversify revenue streams. Both market and organizational factors are important considerations for hospitals contemplating PSHP ownership, and motivations for ownership cover a broad range of financial, competitive, strategic, and mission-based goals. Hospitals considering PSHP ownership must carefully evaluate their competitive landscapes and organizational resources to ensure optimal conditions for this strategy. PSHP ownership has high start-up costs and requires a long-term organizational commitment.