A common theme in our
The federal effort at incubating healthcare co-ops has been a dismal failure. Many are closing and those that remain are on shaky grounds. It will be interesting to see if any survive.
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Medicaid entities are dipping their toes in the transitional market to provide continuity to those individuals whose income are variable and may lose Medicaid eligibility. I don’t see these as meaningful alternatives to the traditional private insurance carrier market.
Hospitals, facing revenue reimbursement pressures and increasing medical management, are also emerging as a viable alternative. Sutter Health in San Francisco, Catholic Health Initiatives in Colorado, North Shore-LIJ in New York and UPMC in Pittsburgh are examples of hospital systems that are saying to the market, “I don’t want health plans to manage me, I want to control my own destiny.”
According to recent industry news, 16 hospital-spawned insurers provide coverage to more than 7 million enrollees with $25 billion in premiums. This is about 2.5% of all Americans. But it is still unclear whether this will be a successful model. The key question is: can these facilities manage care at a lower cost than traditional insurers? Or stated another way: Can the fox effectively watch the hen house?
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The final market disruptors are well financed startups like Oscar, which are looking to recreate the marketplace with an emphasis on engagement and user friendliness. I am skeptical, since the infrastructure cost and ability to negotiate discounts with a large enough networks will take a lot of time and vast capital to create.
It’s a fascinating time to be in healthcare.
Hasday is president of Frenkel Benefits, LLC, one of the largest privately held independent employee benefits brokers in the United States. Reach him at
