By some measures, the Denver metro area has one of the most competitive hospital markets in the country. Major healthcare systems compete each year for supremacy in the multi-billion dollar market.
But now two of those heavyweight health systems — locally based UCHealth and Utah-based Intermountain Healthcare — have decided to…cooperate? Earlier this month, the systems announced plans to form what is called a “clinically integrated network.”
While it may seem like the hospital giants are planning to combine their resources on the clinical side, it’s actually more like forming a giant insurance network. Health systems will remain separate and will continue to compete for patients.
The new network will bring together approximately 700 primary care physicians, hundreds of clinics and dozens of hospitals – all available and networked to consumers whose health insurance contracts with the new clinically integrated network. And, it’s no coincidence, the systems announced that Intermountain’s SelectHealth insurance plan would launch in the Colorado market for Medicare consumers as well as self-purchasers. SelectHealth will use the new network.
The respective leaders of UCHealth and Intermountain said the new clinically integrated network will improve the quality of health care people receive in Colorado while reducing the costs of that care.
“We are thrilled to partner with Intermountain to advance these goals and provide Coloradans with a new option for their health insurance that prioritizes value-based care,” said Elizabeth Concordia, President and CEO of UCHealth, in a statement announcing the new network. “Together, we will help improve the overall health of the communities we serve.”
But consumer advocates wonder if this will actually happen or if it’s another game of big health care systems to get even bigger – and take more money for themselves.
“If they’re essentially using this as bargaining power or as a mechanism to bypass all other insurers, that’s a concern,” said Adam Fox, deputy director of the Colorado Consumer Health Initiative.
How would the clinically integrated network work?
The power of the new network, according to UCHealth’s Michael Cancro, lies in its size.
Cancro is UCHealth’s chief strategy officer and he is also president of an already existing UCHealth provider network called Coordinated Care Colorado. This network will merge with Intermountain’s Colorado Quality Care Network to form the new clinically integrated network. The new network will operate as its own business.
Cancro said this merger does one really important thing: it gives the new network enough patients to start doing in-depth testing and also provide better service.
“By bringing the organizations together, you have a pretty large trove of data as well as the ability to track down and identify patients who are at increasing risk,” he said.
The key to reducing costs while improving care is quickly identifying patients whose health is headed down the wrong path, Cancro said. But, with a smaller patient pool, he said it can be difficult to have enough data to know which signals mean trouble.
The new network’s patient volume means it will collect enough data to perform more accurate analysis, while being able to hire more experts to do this work.
“Having access to data scientists, having access to big enough datasets to be able to say this is an indicator and it’s not,” he said. “The more lives, the better.”
The network will also be able to send alerts to people, letting them know they need to see a doctor about a problem or nudging them to show up for a checkup.
Cancro said the network will initially provide care for more than 300,000 patients. But Cancro said the goal was for more insurers besides SelectHealth to sign deals with the new network, meaning it could attract more patients. He added that it was also possible that other groups of doctors and medical providers would join the network.
Consumer groups hear echoes of hospital mergers
Consumer advocates are skeptical of all these promises. To them, it sounds a lot like what hospital systems have been saying for years when buying local hospitals or merging with other systems.
As in many other states, Colorado’s healthcare system has consolidated. And not always for the benefit of the patient’s wallet.
“Hospital consolidation is likely the biggest driver of pricing and operating margins in Colorado’s Front Range counties,” a 2020 report from the Center for Economic and Policy Research declared.
The new clinically integrated network is not an exact analog of a hospital merger. But it has enough similarities that people like Robert Smith, the executive director of the Colorado Business Group on Health, won’t believe its promises of lower prices and better care until they actually see it. Smith has long been a champion of cutting health care costs in Colorado.
“There is no evidence in the literature that these mergers improve outcomes,” Smith said. “They all said that. But there is no proof.
What is SelectHealth and when will it be launched?
Intermountain is a new player in the Colorado healthcare market. Last year, it merged with SCL Health, giving it a presence in Colorado for the first time. SelectHealth is the insurance arm of Intermountain – and, like Intermountain and UCHealth, it is not-for-profit.
SelectHealth hopes to have plans available for sale in Colorado later this year for coverage beginning in 2024. It intends to offer Medicare Advantage plans, as well as insurance market coverage. individual state, including through the Connect for Health Colorado insurance exchange.
UCHealth’s Cancro said SelectHealth will not sell insurance in all Colorado counties. Instead, it will launch in about 16 to 18 counties, he said. These will primarily be along the Front range, to match UCHealth and Intermountain’s footprints for their healthcare systems.
First, however, SelectHealth must receive approval from the state’s Division of Insurance. The division is reviewing SelectHealth’s application and will announce a decision later this year.
“The DOI has just learned of this joint venture, and we will need to further analyze what it involves and what impact it will have on the state health insurance market,” the Commissioner for Health said. Colorado Insurance, Michael Conway, in a statement. “But this announcement is a clear indication that Colorado continues to be a place where health insurance companies want to come and they want to do business in our individual health insurance market.”
Despite the obvious internal connection, UCHealth and Intermountain executives said SelectHealth would not get a preferred deal when it contracts with the new Clinically Integrated Network, or CIN, as the executives call it.
“The CIN will treat SelectHealth like all payers here,” Mark Korth, regional president of Intermountain Healthcare, said in a statement. “Any plan that aligns with CIN’s goals of ensuring a better patient experience and health outcomes while reducing costs will be considered a valuable partner.”