Our Take: Banner|Aetna joint venture: An ‘innovation laboratory’ touts its successes
In 2016, Banner Health and Aetna formed a joint venture health plan called Banner|Aetna — a separate insurance company created with capital and other resources from both entities.
Now, six years later, Dr. Robert Groves, who serves as executive vice president and chief medical officer of the joint venture, has written about the successes Banner|Aetna has achieved in an article published March 3 in the American Journal of Accountable Care.
The American Hospital Association followed up with its own article based in large part on Dr. Groves’ piece, but with additional commentary. Of note, the AHA said the partnership’s results thus far “show improvement in all areas of the value equation.”
One of the keys to the successes Banner/Aetna has demonstrated lies in the fact that Banner Health and Aetna are co-owners, so Banner has a financial stake in the joint venture. Dr. Groves pointed out that “genuine collaboration” occurs in this setting because Banner Health’s providers are motivated to support members of the JV health plan. After all, their employer, Banner Health, is part of the organization in all ways: financially, operationally, and clinically.
According to Dr. Groves, Banner Health has grown its insurance operations to the point that it now serves more than 310,000 Medicare and Medicaid members.
Through this type of collaboration, Dr. Groves wrote, “organizations like Banner Health and Aetna are really leading the charge toward value vs volume.”
Other models that pair insurance carriers and health systems in different ways, including certain patient-centered medical homes and bundled payment models, can still take more of the push-pull approach seen with the traditional fee-for-service payment structure, Dr. Groves noted.
In the Banner|Aetna joint venture, Aetna is responsible for the predictive modeling and provides out-of-area coverage through its national network. Initially, Aetna also provided the programs supporting outpatient care management and utilization management, Dr. Groves noted. Banner Health provides its expertise in delivering evidence-based care.
The two partners agreed that, where possible, Banner Health would gradually take on more responsibility for the outpatient care management and utilization management services. They felt this was appropriate because the physicians and administrators at Banner Health have a “deep understanding” of patients’ care needs and preferences in the markets the health system serves.
Currently, Banner Health clinicians make about half of all utilization management decisions, such as prior authorization and concurrent review.
Another element of the Banner|Aetna joint venture’s success is the development of multidisciplinary care teams for patients with chronic diseases such as diabetes, asthma, and heart disease. Dr. Groves noted that patients having those diagnoses “at the highest risk” represent 5% of the joint venture’s member population, yet they account for approximately half of its overall health care costs.
These multidisciplinary care teams offer in-home assessments that can shed light on circumstances that might interfere with a member’s care, including family dynamics and social or financial barriers to care. The teams can also engage in hands-on and in-person instruction. For example, the team’s dietitian might go to the grocery store with a member to help that person better understand what a good meal plan is.
Even though there was a “significant” increase in the utilization of psychiatric and behavioral health services as a result of the multidisciplinary care team program, there was also a cost reduction of more than $900 per member per month. After taking program costs into consideration, Banner|Aetna still realized net savings, according to Dr. Groves, largely because of a significant reduction in hospitalizations.
A year ago, Banner Health took over the staffing and operation of the multidisciplinary care team program. As a result, member engagement in the model increased from roughly 25-30% to more than 60% “in a matter of months.”
The Banner/Aetna joint venture has “only scratched the surface of what is possible,” according to Dr. Grove, who wrote that the joint venture serves as “an innovation laboratory” for the parent organizations, and the country, by sharing the solutions that work with Banner Health, Aetna, and Aetna’s parent company, CVS Health.
“Because we are small and nimble with the backing of these progressive companies, we can quickly model value-based solutions that put patients first,” he concluded.
Our Take: In a blog post published in 2018, Health Affairs wrote about the challenges that health systems face if they are interested in starting a new health plan, including prohibitive capital requirements.
At that time, according to the blog post, more than 40 provider systems had either created new health insurance companies or acquired existing health plans since 2010.
All of the new provider-sponsored health plans that were either established or announced between 2015 and 2017 were joint ventures involving health systems and health insurance companies.
There are several advantages associated with this strategy, including a shorter timeline for getting the company up and running and bringing products to market. In addition, health systems are required to put up less capital, and the expected operating losses are limited during the early years of operation.
Of the 11 joint venture health plans formed or announced from 2013 to when Health Affairs published its blog post in 2018, five were collaborations involving Aetna.
Partnering with a health system gives an insurer the opportunity to increase its local market share and improve health delivery at the local level, Health Affairs noted.
From the perspective of the landscape in 2018, Health Affairs wrote that it was unclear whether the strengths of the joint venture partners would be enough to overcome the challenges of starting new health insurance companies “in turbulent times.”
Little did the authors of the blog post know then just how much more turbulent the times would become. Nonetheless, it seems that Banner|Aetna hasn’t just weathered the turbulence. Apparently, it has flourished.
Other health systems in recent years preferred to go it alone, with less than stellar results. Northwell, for instance, received its insurance license for CareConnect in August 2013. By 2017, the New York-based health system had grown the health plan to more than 125,000 members. But in August of that year, citing mounting financial losses and an untenable political environment, Northwell said it was exiting the insurance business and shut down CareConnect.
Several Blues plans are suing Walgreens, alleging the drug chain has been overcharging for prescription drugs by submitting claims with “artificially inflated U&C prices.” The usual and customary charge for a prescription drug refers to the amount a cash-paying customer would be charged; it is used as a reimbursement ceiling so that payers do not pay more than customers without insurance pay. The complaint states that Walgreens “knowingly and intentionally concealed from Plaintiffs the actual cash prices offered to members of the general public paying without insurance” through the chain’s Prescription Savings Club “and other similar discount programs.” The plaintiffs contend that, as a result of the alleged inflated prices, they have overpaid Walgreens millions of dollars since 2007, when the company started its Prescription Savings Club, and that Walgreens’ “actions are ongoing.”
Two years ago, other Blues plans filed a similar lawsuit against Walgreens. A year earlier, Walgreens settled a lawsuit brought by the federal government and several states; in that case, the plaintiffs alleged that Walgreens had defrauded Medicaid by overstating its U&C price for prescription drugs. Walgreens admitted no wrongdoing in the settlement.
Hospitals and health systems could be at high risk for cyberattacks, according to IT security experts who spoke at HIMSS, Healthcare Dive reported. The pandemic has made hospitals more vulnerable to cyber threats, they said, because resources that would have been allocated to cybersecurity were diverted to patient care. High turnover among IT staff has compounded the problem. So have the trends of moving data to cloud storage and using personal electronic devices for work-related purposes. The risk of cyberattacks could be even greater if the U.S. were to become directly involved in the war between Russia and Ukraine, one expert told Healthcare Dive. Even if hospitals were not specifically targeted, cyberattacks that disrupt internet access and supply chains would affect hospitals’ ability to care for patients. To prepare, experts advised taking steps such as instituting multifactor authentication on outward-facing applications and making sure that their IT team or a reliable third party is actively monitoring for threats.
Cleveland Clinic and Boston-based PathAI will collaborate on the development of new pathology diagnostics through a five-year strategic partnership that will combine PathAI’s artificial intelligence-based platforms with Cleveland Clinic’s data and clinical expertise. The collaboration “will enable the digitization of hundreds of thousands of pathology specimens” across various disease areas, they noted in a press release. By linking this digital pathology data with clinical and molecular data, they will create a dataset for research that will implement PathAI’s technology platform and pathology algorithms. “It is increasingly clear that AI-powered pathology can radically enhance diagnostic accuracy and treatment selection,” said Dr. Brian Rubin, chair of Cleveland Clinic’s Pathology and Laboratory Medicine Institute. Under their agreement, Cleveland Clinic will become an equity holder in PathAI.
The ongoing move toward outpatient and home care accelerated during the pandemic, research from Moody’s Investors Service indicates. Various factors were causing hospital admission rates to level off even before COVID-19, according to Moody’s, and outpatient revenue has exceeded inpatient revenue in recent years. The pandemic led to a steep uptake of telehealth, and Moody’s anticipates that usage will remain higher than pre-COVID-19 levels, despite the decreases seen as patients return to in-person care. Going forward, Moody’s also expects an uptick in at-home acute care services. This shift away from inpatient care will continue to threaten hospitals’ margins, according to Moody’s, though hospitals that provide higher levels of specialty care are less likely to feel the pinch.
Sen. Chuck Grassley, R-Iowa, urged the Federal Trade Commission to investigate the effect that pharmacy benefit managers have on consumers’ out-of-pocket costs. In a letter to FTC chairwoman Lina Khan, Sen. Grassley asked the commissioners to “find consensus and vote to move forward on a revised 6(b) study to examine competitive concerns within the PBM industry.” He added that such a study “into the practices of these intermediaries would provide transparency and insight about possible competitive harms.” At a public hearing last month, two of the commissioners voted in favor of conducting a broader study into PBM practices, but two others voted against it because of concerns about the study’s design.
What we’re reading
Patient Assistance Programs and the Anti-Kickback Statute: Charting a Path Forward. JAMA Viewpoint, 3.10.22
Pandemic-Related Workplace Violence and Its Impact on Public Health Officials, March 2020 ‒January 2021. American Journal of Public Health, 3.17.22
Where Americans Die — Is There Really “No Place Like Home”? NEJM, 3.17.22