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Anthem and Aurora Join Forces in Wisconsin

Written by Hugh Devlyn | Tue, Apr 26,2016 @ 12:30 PM

In with the old, out with the new. During the 1980s and 1990s many health care systems around the country decided to test their luck in the health insurance business. Most of these organizations did not fully understand the risks and challenges of being in the insurance industry. In the end, most of these health care systems ended up selling their plans to insurance companies or simply shutting them down. As of April 20th, 2016, Anthem Blue Cross and Blue Shield and Aurora Health Care embark on a new joint venture health insurance company. This tried approach is making a comeback with a modern, employer friendly twist. 

The industry has come full circle as health systems adapt to the changing health business landscape, caused by the Affordable Care Act (ACA). We are witnessing a resurgence of interest in health plan ownership as the health system looks to grow revenue in the new era of value-based care. However, history tends to repeat itself, so we must be aware that this trend is not without risk. 

The Impact of the ACA on Health Plan Ownership

There are many reasons for the heightened interest in health plan ownership, but the bottom line is that health care reform and its changes to reimbursement methods and treatment delivery, have forced providers to think more like insurers. 

1) Reimbursements are increasingly linked to the quality of care, out-comes, and cost-effectiveness rather than merely the volume of services delivered.

 2) Providers have gained experience in managing financial risk as payment reforms such as shared savings/loss arrangements, capitation, and bundled payments (which have forced providers to re-engineer care delivery). 

3) Hospitals are seeking out new sources of revenue due to declining growth of inpatient spending.

4) Medicaid is shifting participants into managed care plans. Providers are beginning to sponsor health plans to serve these populations, capture this revenue, and cut out the middle man.

The Rise of Well Priority by Anthem and Aurora

On April 20th, Anthem Blue Cross and Blue Shield in Wisconsin and Aurora Health Care announced their partnership to form a health insurance company called, Wisconsin Collaborative Insurance Company. Together they will offer a health insurance plan to employers called, Well Priority.

This partnership combines Aurora's care delivery system with Anthem's insurance knowledge to a create a new way of delivering health care to consumers. The Well Priority plan is a bet by Aurora that it can configure itself into broader care delivery organization, which provides care at a lower cost than its competitors. It will be interesting to see how a regional health system backed by an insurer partnership will play out.

They join the Froedtert Health System as the latest Wisconsin providers to enter the insurance field. Froedtert owns half of the Network Health and recently launched in the Exceedent health care plan for self-funded employers. 

Employer Perks

The good news for employers will be increased options, competition, and innovation, which should slow health care cost increases. Both will be focused on innovation, patient advocacy, quality, efficiencies, health and well-being, data integration, onsite and near-site care, social media, and the focus to improve the patient experience.

Sales for Well Priority and Exceedent will begin later this year. It is expected that they will initially be focused on medium to large-size employer groups. We are currently in discussions with the Plans on your behalf and will continue to keep you apprised as they release additional details.