More than 1 in 4 major U.S. health systems intend to launch a Medicare Advantage plan in the next four years, according to a new survey of health system executives released June 6.
St. Louis-based Lumeris, an industry leader in value-based care solutions, announced that 27% of major U.S. health system executives participating in the survey intend to launch an MA plan in the next four years, and also found that only 29% of those respondents planning to launch a Medicare Advantage plan felt confident in their organization’s ability to do so successfully.
“These survey findings are consistent with our conversations with healthcare executives across the country who are feeling a sense of urgency around Medicare Advantage strategies but also realize that this type of work is vastly different than traditional health system operations,” said Jeff Carroll, executive director of health plans at Lumeris.
According to the 90 surveyed executives from major health systems, their top reason for launching a Medicare Advantage plan is the opportunity to capture more value by controlling a greater portion of the premium dollar as compared to fee-for-service Medicare. Other key drivers cited include market and regulatory trends supporting Medicare Advantage. In particular, shrinking Medicare margins could threaten the viability of hospitals and health systems as the senior population continues to grow and becomes a larger proportion of providers’ patient panels.
Survey respondents also recognized that launching a Medicare Advantage plan will be challenging due to the complexities of operating an insurance plan which are far different than the capabilities required to successfully operate a health system. They also shared concerns about the significant financial investment required and an overall lack of expertise in the health plan space. The majority of respondents, 59%, indicated they were likely to utilize outside resources to launch their plans — and that those resources are very likely to include a vendor partner that can mitigate operational risk.
“Launching and managing a Medicare Advantage plan requires skills beyond the core competencies of most health systems, which is one reason many provider-sponsored plans fail in the first few years,” said Carroll. “Through those failures, it has become clear that providers who select the right partners increase the likelihood for greater success in a shorter period of time. That’s why the Lumeris model, which encourages providers to partner with a collaborative payer to reduce financial risks, and with an operational partner to handle contracting, compliance, utilization management, and various day-to-day plan activities, is gaining traction so quickly. We couldn’t be more pleased to help health systems translate their Medicare Advantage ‘plans’ into reality and enable them to deliver better care at lower costs for seniors.”
Lumeris serves as a long-term operating partner for organizations that are committed to the transition from volume to value-based care. Lumeris won the 2018 Best in KLAS award for value-based care managed services for helping clients deliver improved clinical and financial outcomes. This was the third year it received the award. For the past seven years, Essence Healthcare, Lumeris’ inaugural client with more than 65,000 members in Missouri and Illinois, has received 4.5 to 5 Stars from the Centers for Medicare and Medicaid Services.