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Our Take: Banner|Aetna joint venture: An ‘innovation laboratory’ touts its successes

Mar 21, 2022

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.

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