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How Provider-Led Health Plans Impact Quality

Study shows provider-led health plans offer better care quality, utilization, patient satisfaction

Alternative payment models centered around high-quality, low-cost care continue to transform the health care landscape. Though they are evolutionary, these models increase financial risk for health care providers. To help mitigate that risk, more provider organizations are beginning to operate health insurance plans. Today, there are more than 100 provider-led health plans (PLHPs) in the United Sates, covering 15 million individuals.1,2

Study overview

The number of PLHPs has increased significantly during the past 20 years, and we wanted to understand the trend’s momentum. Specifically, we wanted to determine if a connection exists between PLHP status and health care quality, utilization, and patient satisfaction outcomes. We also wanted to examine whether any associations differed based on a plan’s size, nonprofit status, or region.

To accomplish this, we performed a cross-sectional study of 2016 Medicare Advantage plans using enrollment data from the Centers for Medicare and Medicaid Services. Our objective was to compare select quality, utilization, and patient satisfaction outcomes between PLHPs and non-PLHPS.

The results

We found that Medicare Advantage contracts offered by PLHPs performed positively. This was consistent with the findings of similar studies.1,3 Our results showed that receiving care through a PLHP improved quality, effectiveness, and patient satisfaction. In addition, procedure rates were lower for PLHPs than for non-PLHPs.

Larger and nonprofit PLHPs were found to perform better than their smaller and for-profit counterparts, respectively.

The progression of PLHPs

Vertical integration between payers and providers has increased steadily, and this trend is expected to continue. Aligning payer incentives and managing services across the continuum of care can benefit patients, providers, and health systems. The approach may be particularly advantageous in population health management efforts, and it can give PLHPs an edge in terms of outcomes and lower premiums.

For complete study details and results, we invite you to read our article in the American Journal of Managed Care.

1. Johnson G, Lyon Z, Frakt A. Provider-offered Medicare Advantage plans: Recent growth and care quality. Health Aff. 2017;36(3):539-547.

2. Khanna G, Narula D, Rao N. The Market Evolution of Provider-Led Health Plans. McKinsey & Company. Healthcare Systems and Services Practice. 2016.

3. Lyon ZM, Feyman Y, Johnson GM, Frakt AB. Quality of provider-offered Medicare Advantage plans. BMJ Qual Saf. 2017.