Pharm D Corner

Insights from doctors of pharmacy.

Provider-Sponsored Plans Reaping Benefits While Keeping Up With Value-Based Care

Krishna R. Patel, PharmD
MediMedia Managed Markets

Two hundred seventy provider-sponsored plans (PSPs), in which health systems and insurers join forces to create an integrated model, are in operation today—up from 107 just two years ago. More and more PSPs continue to outperform their competitors as they have learned the hard lessons from the late 1990s, when many providers entered and exited the PSP business often with sizable and embarrassing losses. Today, however, many powerful global drivers such as downward pressure on costs, aging population, and the embrace of value-based models, have made the market ripe for PSPs’ emergence as a potentially disruptive industry innovator.

Health care systems and insurers (although sometimes just the health care system, depending on the level of plan integration) assume a shared risk to ultimately drive volume, diversify revenue, and create differentiated offerings.

Patients stand to benefit. It’s no secret that insurers, though sometimes due to forces out of their control, increase premiums every year. With beneficiaries bearing more and more of the cost with time, at some point, they have to say, “enough,” as they delay or avoid seeking necessary care altogether, negatively impacting outcomes in the long run. Because PSPs control key parts of the delivery system, it allows them to break open from the fee-for-service restraints and use premiums more efficiently. Secondly, imagine a customer experience in which the beneficiary calls just one location that addresses everything under the care continuum, including drugs, check-ups, surgeries, vaccinations, physical therapy, and mental health services. That’s where PSPs are headed—if they’re not there already.

One such PSP is located in my hometown in northern Virginia. Inova, a health system with more than a 50% market share in northern Virginia, and Aetna, have successfully partnered to form a new insurance company and health plan altogether. The new insurance company, Innovation Health, has been able to improve cost and quality outcomes, cut redundancy and waste, and has been ahead of budget every year since it was started four years ago.

Krishna R. Patel

Krishna R. Patel, PharmD, is a senior medical writer at MediMedia Managed Markets. She is also an adjunct faculty member at the Philadelphia College of Pharmacy and Temple University.

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