Taking aim at HMO giant Kaiser Permanente, insurer Anthem Blue Cross is joining forces with several big-name hospitals and their doctors to create an unusual health plan option for employers in Southern California.
The joint venture being announced Wednesday brings together seven rival hospital groups in Los Angeles and Orange counties, including well-known institutions Cedars-Sinai Medical Center and the UCLA Health System. The deal reflects the pressure insurers and hospitals alike are facing to hold down healthcare costs for employers and their workers. The California Public Employees' Retirement System, the giant pension fund and the nation's second-largest healthcare buyer, has already signed on as the first major customer in the Southland starting Jan. 1. The new Vivity health plan also includes MemorialCare Health System, Good Samaritan Hospital, Huntington Memorial Hospital, Torrance Memorial Medical Center and PIH Health. In addition to their hospitals, this Anthem HMO includes all of their affiliated physicians offices, surgery centers, clinics and other outpatient facilities...
The agreement marks a major departure from industry practice, in which insurers [rather than providers] usually bear the financial risk and try to squeeze hospitals for lower prices — or exclude them altogether — from their insurance networks over cost...
This new arrangement will look very much like a regular HMO, in which patients are responsible for one simple co-pay at the doctor's office, for a medical procedure or a prescription...
"Under the current model, hospitals want to keep occupancy rates up," said Pam Kehaly, Anthem's west region president and a key architect of this deal. "This is in complete opposition to that. For this joint venture to succeed, we have to keep occupancy rates down." Susan Ridgely, a senior policy analyst at the Santa Monica think tank Rand Corp., said these hospitals are probably betting that they can attract enough new patients and referrals through (the new) Vivity (plan) to offset the gradual decline in inpatient admissions...
The deal represents an about-face for Anthem, which in recent years has singled out Cedars and UCLA, in particular, for high costs that were burdensome to employers...
Full story at http://www.latimes.com/business/la-fi-anthem-hospitals-deal-20140917-story.html
And there's a song to go with it (which would need a few words to be changed):
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