It takes teamwork for most organizations to succeed so why not use that concept for healthcare? That’s what Dr. Rushika Fernandopulle, CEO and co-founder of Iora Health reasoned when he started the Boston-based company in 2012. In fact, Dr. Fernandopulle told the Boston Globe last May, “We are building a brand new version of healthcare.” And it looks like it’s catching on – as of the end of 2015, Iora runs about 29 clinics across 8 states. The company's latest partnership – with UnitedHealthGroup – helped established Harken Health, with clinics in Atlanta and Chicago now covering about 35,000 members with individual and small business plans.
The move confused many since UnitedHealth announced last November it was considering pulling out of the exchanges altogether in 2017 since it was losing close to $720 million. That figure was updated during an investor call in January 2016 with CFO Dan Schumacher announcing the company expected losses to be closer to $1 billion. The insurer did confirm last week it will pull out of Georgia and Arkansas ACA markets but it’s unclear how this will affect these two states’ markets. Glenn Allen, a spokesman for Georgia’s state insurance commissioner, told Bloomberg that after UnitedHealth pulls out, Georgia will still have eight insurers that offer ACA policies.
The Illinois health insurance market faced some turbulence last year with Assurant Health pulling out of the individual plan marketplace and Blue Cross Blue Shield, which had the highest enrollment in the state, dropped its popular individual plan which previously boasted the largest network of doctors and hospitals.
A recent S&P analysis noted the individual health market and its regulation under the ACA have taken criticism from insurers, who lost about $3 billion on it in 2014 and probably even more in 2015. However, the researchers suggested the individual health insurance market may stabilize in another one to two years. "[W]e are revising our view to say that it will take closer to five years for the individual markets to stabilize," credit analyst Deep Banerjee
“There’s major flux in the market,” Bill Hallberg, chief enrollment officer at ACAenroll.com told the Chicago Tribune. “Carriers are reshuffling the decks on their offerings in order to reach some form of profitability.” Perhaps Harken Health viewed this as an opportunity when it opened its four Chicago-area and six Atlanta-based primary care sites in January.
UnitedHealth has invested $65 million to get Harken Health, an independent subsidiary, up and running, with a focus on an improved primary care model that will potentially reduce costs. Harken Health CEO Tom Vanderheyden told Healthcare Dive via email, "Strong relationships and a home base for high-quality primary care have been shown to improve patient health, satisfaction, and lower overall medical costs. The dedicated Harken Care Teams, including doctors, health coaches and behavioral health specialists, are empowered with the time to listen and build authentic and trusting relationships with members.”
Vanderheyden added UnitedHealthcare’s recent announcement to pull out of the Georgia exchange “will have no impact on Harken Health. We are committed to serving our members in Atlanta and Chicago regardless of how they purchase our insurance.”
A promising primary care model
Harken says it spends twice as much on primary care compared to the average insurer, according to Kaiser Health News. All physicians are on salary, which eliminates the whole fee-for-service model. Iora trains and provides all staff, which includes personal health “coaches” that are assigned to each member. The coaches make sure patients understand physician recommendations and medications and motivate them via positive lifestyle changes. Unlimited free primary care visits at their locations are included in the plan as well as 24/7 access to physicians via phone, email, and video chat. All sites offer complimentary mental health counseling, yoga, nutrition guidance, cooking and fitness classes and acupuncture. The only copays are for specialists and prescriptions. Patients have access to UnitedHealth’s large network in the Chicago and Atlanta areas for specialists.
The company has priced its plans competitively. For example, on the Illinois exchange, a silver plan for a 40-year old nonsmoking male is $279 a month with a $3,750 deductible. A Blue Cross and Blue Shield of Illinois silver plan with a similar provider network is a bit more at $297 a month (also with a $3,750 deductible) but charges a standard 20% coinsurance, which Harken doesn’t have, reported Modern Healthcare. When asked how the company foresees making money, Vanderheyden told the publication, “We’ll see how it works claim-wise in 2016. It’s reasonably proven that if you overinvest in primary care, you have lower downstream cost in the system.”
Iora Health backs this up with promising results – the company has shown a 35% to 40% reduction in hospitalizations and a 12% to 15% reduction in total healthcare costs compared to matched controls.
Additional primary care models and incentives
Harken Health isn’t alone in its quest for integrated and better primary care. There are several other newly-bred insurance companies seeking better patient outcomes with reduced costs.
Zoom+ in Oregon is a company that offers team-based primary care via same day appointments, along with telehealth, health coaching, and behavioral healthcare. The company now has 28 clinics in the Portland area and also includes dental care, fitness and brain training, parenting and food classes. Another insurance startup, Oscar, which offers free primary care visits, free labs, and free generic prescriptions, has increased enrollment to 145,000 customers from 40,000 in 2015.
It’s not just private insurers focusing on changing primary care. CMS just announced its Comprehensive Primary Care Plus Initiative. A five-year model set to launch in January 2017, the program includes two primary care “tracks” with incrementally advanced care delivery requirements and payment options for primary care practices. The idea is “to deliver better care to result in a healthier patient population,” according to CMS’ website. Practices participating in both tracks will alter care delivery, based on key Comprehensive Primary Care Functions: access and continuity, engagement, comprehensiveness and coordination, patient and caregiver engagement, and planned care and population health.
Vanderheyden told Healthcare Dive Harken exceeded its membership goals in its first year on the market and is “excited by the success during our launch year in Atlanta and Chicago and we look forward to bringing our innovative, relationship-based primary care and health insurance markets across the U.S. However, it’s too soon to comment on additional markets and national expansion at this time.”