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HealthPocket: Provider-owned plans may charge more

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Physicians and hospital managers have long argued that, when they can break free from the health insurers and run their own health care services organizations, they save money and improve the quality of care.

Analysts at HealthPocket are casting doubt on part of that argument.

A quick review of public health insurance exchange plan prices suggests that the provider-owned plans may charge more for coverage than other plans charge, the analysts write in a new commentary.

The analysts based the commentary on 2015 individual Patient Protection and Affordable Care Act (PPACA) exchange plan data from 12 counties that offer consumers access to both provider-owned plans and non-provider-owned plans.

The exchange system managers are not yet posting exchange plan health outcomes or patient satisfaction data.

But the analysts found that a provider-owned silver plan was the cheapest silver plan available in only eight of the 12 sample counties, and that the cheapest provider-owned silver plans available would cost a 40-year-old nonsmoker an average of $259 per month, compared with an average of $231 per month for the non-provider-owned plans.

The cheapest provider-owned silver plans in the counties cost 12 percent more than the cheapest non-provider-owned plans, the analysts say.

See also: HealthPocket: Nonprofits mount broad, hard fight for silver sales

Similarly, the provider-owned cheapest bronze and gold plan options cost about 13 percent more than the cheapest non-provider-owned bronze and gold plan options.

Traditionally, health care providers have predicted that their provider-owned organizations would reduce health care costs by moving providers away from fee-for-service health care reimbursement system, and by giving providers a financial incentive to work together with other providers to improve the quality of care and reduce unnecessary use of care.

If the results from the 12-county analysis give a good picture of what’s happening in the country as a whole, they may call into question whether moving away from the fee-for-service reimbursement system will do much to lower U.S. health care costs, the HealthPocket analysts say.

The fee-for-service approach may give providers an incentive to deliver too much care, but per-patient reimbursement may give providers an incentive to provide too little care, the analysts say.

“In both cases,” the analysts say, “the actualization of the incentive is affected by a plurality of other factors.”

See also: PPACA exchange issuers head South


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