Health Systems Compete with Medical Insurers for Clients and Revenue - The Minute

Traditional business models in the health care industry continue to be disrupted by the Affordable Care Act. In a potentially major shift in practice, health systems and medical groups are now competing against medical insurers by enrolling employer groups and individual consumers in their health plans, reports Modern Healthcare. A number of major, multi-state health systems, including Ascension Health, the largest U.S. not-for-profit system, have acquired health plans or insurance licenses. So have some regional health systems and even a few medical groups.

Providers are turning to the insurance market because they are entering global budget contracts and would like to capture savings from more efficient care delivery themselves. But health care systems and medical groups that launch their own plans complicate their business-as-usual negotiations with insurers over payment rates and networks. Some health systems that have entered the insurance markets have even had their provider contracts canceled by insurers in disputes over reimbursement rates. It looks like the ?creative destruction? of innovation is alive and well in the health care sector.

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