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For UW Health, Health Plan Ownership Provides Financial Stability.

Alan S Kaplan1

  • 1Alan S. Kaplan, MD, FACHE , is CEO of UW Health in Madison, Wisconsin.

Frontiers of Health Services Management
|May 24, 2023
PubMed
Summary
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Owning a health plan offers health systems benefits like improved value-based care and financial gains. However, the "payvider" model presents significant challenges, demanding careful consideration for successful integration.

Area of Science:

  • Health Systems Management
  • Healthcare Economics
  • Value-Based Care

Background:

  • Academic medical centers traditionally operate on a fee-for-service model.
  • The shift to value-based care necessitates new strategies for health systems.
  • Integrating provider and payer functions presents unique operational complexities.

Purpose of the Study:

  • To explore the advantages and disadvantages of health plan ownership for health systems.
  • To analyze the experiences of UW Health in developing a hybrid "payvider" model.
  • To assess the feasibility and impact of provider-owned health plans on mission and financial margin.

Main Methods:

  • Case study analysis of UW Health's journey as a majority owner of a provider-owned health plan.
  • Examination of the challenges and benefits encountered in managing a hybrid payer-provider system.

Related Experiment Videos

  • Evaluation of the strategic decisions and operational adjustments made by UW Health.
  • Main Results:

    • Health plan ownership can drive value-based care adoption and improve financial margins.
    • The "payvider" model imposes substantial demands on both the health system and the health plan.
    • UW Health's experience highlights that this model is not universally applicable but can be crucial for specific systems.

    Conclusions:

    • Health plan ownership is a complex strategy with significant potential benefits and burdens.
    • Successful implementation requires a deep understanding of both provider and payer dynamics.
    • For UW Health, this model is integral to achieving both its mission and financial objectives.