- A group of five smaller hospital systems in Connecticut announced this week that they are trying to remain independent by creating the Value Care Alliance. The organizations taking part are: Danbury Hospital, Lawrence + Memorial Hospital, Middlesex Hospital, New Milford Hospital, Norwalk Hospital and St. Vincent’s Medical Center.
- The purpose of the alliance is to allow the hospitals to work together to increase purchasing power and share best practices, all without taking on the overhead that sometimes comes with consolidation. At some point, the alliance may offer an insurance product that would guide beneficiaries to the hospitals in the group.
- At the same time, the large for-profit chain Tenet Healthcare Corp. is planning to purchase five hospitals in Connecticut. Tenet is working with Yale New Haven Health System, one of the two largest nonprofit hospital systems in the state.
What's interesting about this alliance is that not all of the hospitals are individual operators. St. Vincent's is a part of Ascension Health and Danbury, New Milford and Norwalk are part of the Western Connecticut Health Network Chain.
Meanwhile, this isn't the first of this kind of affiliation: Salem, WakeMed Health & Hospitals in Raleigh and Vidant recently announced that they were forming a similar alliance and 30 hospitals in New Jersey, Pennsylvania and New York did the same thing last year. The hospitals in this group, AllSpire Health Partners, are worth a total of more than $10 billion.
It's also significant to note that the alliance is considering offering an insurance product at some point down the line. This is an increasingly popular trend: According to the Washington Post, in 2013 28% of hospitals were expecting to launch their own plans over the next five years and 18% had already dipped into the business. Premier Health, the largest hospital network in the Dayton, Ohio area, now offers insurance coverage to its own employees, but has announced that it will be expanding next year into the state exchanges, private and group markets outside of the exchange and Medicare Advantage plans.
There are some risks to hospital-insurer integration—as shown by the longstanding dispute in Pennyslvania between Highmark (the dominant health insurer) and University of Pittsburgh Medical Center (the dominant health system)—but some believe that provider-payer integration, or at the very least collaboration, will improve costs and outcomes across the system. According to Brad Sitler, the principal industry consultant at the SAS Center of Health Analytics and Insights, creating a population database that is predictive of patient outcomes is dependent on combining EMR data with more-complete payer data.
"If you have a provider and payer who have a non-strained relationship and they could strike up a deal to share data, you could actually have a holistic view of a patient," Sitler told Healthcare Dive. "You could start leveraging that data today to start building risk strata, and start looking for patients that are on the trajectory to becoming high risk. That data is very predictive."
Want to read more? You may enjoy this article about the Highmark Health gamble: How risky is hospital-insurer integration?