Speaking today at a webinar sponsored by AIS, Morningstar, Inc. analyst Matthew Coffina points to Steward Health Care System in Massachusetts as an example of the type of "increasingly powerful and well‐organized Accountable Care Organizations [that will] compete directly with insurers."
Steward got its start in Massachusetts through the November 2010 acquisition of the six-hospital Caritas Christi chain. It now operates 10 hospitals in Massachusetts and is seeking regulatory approval to acquire an 11th in Woonsocket, R.I.
Coffina notes that historically, employers have demanded "broad provider access to satisfy a diverse group of employees." But as more employers shift to defined-contribution benefit designs under which individuals purchase their own coverage, "they are likely to be willing to sacrifice broad provider access for lower costs at the providers they use the most." And a provider system like Steward, "through administrative efficiency and better care management,...could potentially offer similar benefits at much lower cost."
To counteract these strategies, Coffina says, health insurers are employing a variety of strategies, including purchasing private exchanges, becoming back-end service providers, purchasing medical groups in order to directly provide primary care services and even attempting full vertical integration through the acquisition of medical systems.
What do you think — will these strategies work?
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