Allina Health System and insurance giant Aetna plan to empower competition in the regional health insurance company market through a joint venture that would begin offering commercial coverage in the Twin Cities next year.
Called Allina Health and Aetna Insurance Company, the jointly owned health plan will link one of the state’s greatest hospital and clinic systems with a national insurer that has not had a big presence in the state.
Earlier, Allina owned the Medica health plan, but they split in the year of 2001 under queries from ex-Minnesota Attorney General Mike Hatch about alleged mismanagement.
Dr. Penny Wheeler, the Allina chief executive, claimed that she wonders if her health system may operate better today had the Medica relationship been preserved.
That is because so-called “payer-provider” partnerships can more conveniently establish innovations, Wheeler said, since they have incentives to coordinate care and promote preventive services such as flu shots.
“It makes me mad … when we benefit [financially] because the community is ill with flu,” she claimed. “Right now, we do not necessarily have the incentives well-aligned for the results we need for our sufferers and communities.”
Across the country, there is an increasing trend toward partnerships between insurers and health care providers, under the theory that they can jointly work to give care that lowers cost without sacrificing quality. The federal Affordable Care Act has supported the trend by calling for “accountable care organizations” in the federal Medicare program.
In a report previous year, analysts with Moody’s Investors Service predicted that an increasing number of health care systems would step into the commercial health insurance business in case to “make better care management and gain market share.”
“Health insurance gives health care systems a way to control costs, diversify revenues and efficiently track and measure patient outcomes, known as population health management,” the report claims.
The emergence of Aetna in the Twin Cities insurance market might surprise few, since nonprofits have had such a large share of the business. But for-profit carriers, involving Aetna, have been around for years, stated Jim Schowalter, chief executive of the Minnesota Council of Health Plans, a trade group for insurers.
“This is another attempt in our state that shifts us away from old fee-for-service systems,” Schowalter claimed in a statement. “Working together, doctors and insurers can deliver better personal care and hold down medical expenditures.”
The latest Allina-Aetna insurer will incorporate as a for-profit company. There are no plans, Wheeler said, for the company to enter the state’s HMO market, where state law permits just nonprofits.
Republicans in the state Legislature need to open up the HMO market to for-profit carriers, but Wheeler claimed that proposal played no part in Allina’s decision. Allina released a request for information from potential insurance company partners back in the year of 2015, she said.
It is not still clear, Wheeler said, either the new company will sell policies in the state’s individual market, where regulators and state lawmakers have been worried about a deficiency of competition because of financial losses.
The Aetna partnership will assist Allina to become more like the Bloomington-based HealthPartners system, which involves one of the state’s largest health insurers, and Fairview Health Services in Minneapolis, which owns PreferredOne, an insurance company based in Golden Valley.
“Provider-payer relationships already exist in the market,” Wheeler claimed. “We considered this is a way to make our care better.”
Aetna and PreferredOne declared a deal in the year of February 2016 where the insurers would partner to better compete for business from important employers that give insurance benefits to works. That relationship is ongoing, and will not be affected by the Allina announcement, in accordance to a PreferredOne spokesman.
Allina, meanwhile, works with Eagan-based Blue Cross and Blue Shield of Minnesota on a health insurance product available to people in the Twin Cities. Wheeler claimed that the Blue Cross relationship will continue, as well.
Allina and Aetna didn’t reveal financial terms. The new company will provide fully insured and self-insured commercial products by the year of early 2018, followed by products in other markets like Medicare. More details are hoped in the coming months.
Wheeler claimed that the deal represents a partnership, and not a merger. The new company will have its own leadership team, she stated.
Allina Health System is believed to be one of Minnesota’s greatest operators of hospitals and clinics, involving Abbott Northwestern Hospital in Minneapolis and United Hospital in St. Paul. In the year of 2015, the health system posted revenue of $3.9 billion.
Connecticut-based Aetna is one of the nation’s greatest health insurers, with revenue of $15.8 billion during the third quarter of 2016 year. The Allina joint venture is the fourth such arrangement in regional markets, following similar deals in northern Virginia, Texas and Arizona.
“We’re excited to bring a larger Aetna presence into this marketplace alongside our partner in this joint venture, Allina,” stated Brigitte Nettesheim, the company’s president of transformative markets. Allina assists Aetna to introduce itself to the Twin Cities market because the health system has “an extremely powerful brand in the marketplace,” Nettesheim stated.
The post Allina Health System, Aetna to initiate insurance company in Minnesota appeared first on Healthcare Insurance News.