Guide to the Latest Trend of Provider-sponsored Health Plans

Published: April 1, 2019

When an existing insurance company partners with providers to form a provider-sponsored health plan, providers and their patients can have a more direct relationship.

Provider-sponsored health plans (PSHPs) are trending in the health care field, with more employers than ever before choosing them over traditional fee-for-service plans. These provider plans can save employers money – they manage costs efficiently while still providing quality health care to their members.

A PSHP is a health plan sponsored by a health system, physicians group or hospital. It can be created either on its own or in partnership with an existing health plan.

In either case, the ideal PSHP will have an integrated network of providers working together to deliver high-quality, affordable and desirable health care. That network should not be siloed or narrow, however. Rather, it should be extensive enough to offer a variety of desired services and providers to its members.

The public wants convenience, affordability and services that meet their specific health care needs. PSHPs focus on providing the right services at the right time to their members. The ideal health plan supports the provision of the needed and beneficial services that its members want, and delivers them in a cost-effective manner.

When providers join with an existing health plan to form a PSHP they get to take advantage of that insurer’s management expertise in navigating today’s highly-regulated and complex health care system. This in turn frees them up to be patient-centered, efficient, and to integrate the latest health information technology and care management models into their medical practices.

In a traditional fee-for-service model, a health plan oversees providers and acts as an intermediary between them and its members. This often can leave members and their doctors feeling disconnected. When an existing insurance company partners with providers to form a PSHP, however, providers and their patients can have a more direct relationship. That’s the model Western Health Advantage favors and it’s why, in the Bay Area, we have partnered with Canopy Health to form a new health plan option for employers.

The reputation a PSHP has locally for excellent member service is critical to its success. Reputations are earned over time and count for a lot. Do community members think highly of the health plan? Is the health plan known for caring about their community? Do the providers in the plan’s network also have great reputations?

People want to find providers near where they live or work. The advantage for folks enrolled in a PSHP with a strategically-chosen network of multiple providers (rather than just one provider network) is that they have more local choices than they would in a closed system.

When providers have a stake in the efficiency of their provision of health care, they have an additional incentive to deliver valuable patient care that is competitively-priced for their area, and they coordinate care with other providers more efficiently. That benefits both doctors and patients and, ultimately, employers who chose that PSHP – they now have lower premiums and employees who are satisfied with their health plan.

Health plan members want their medical treatment coordinated by community partners who care about them. The combination of local providers forming a PSHP with an established insurance provider is a partnership that’s hard to beat.

Learn more about health plans for your business offered by Western Health Advantage.

Headquartered in Sacramento, Western Health Advantage is a nonprofit HMO health plan founded in 1996 with a community-based mission by doctors and health care providers.  WHA serves 14 Northern California counties (Sacramento, El Dorado, Placer, Yolo, Colusa, Solano, Napa, Sonoma, Marin, San Francisco, San Mateo, Alameda, Contra Costa and Santa Clara). 

Published in the San Francisco Business Times on April 1st, 2019