New Initiatives Offer Innovative Alternatives to Traditional Insurance Plans, According to Findings from Decision Resources Group
August 4, 2014 - Burlington, Mass.
– Decision Resources Group finds that University of Washington Medicine (UW Medicine) and Providence Health & Services-Swedish Health Services (Providence-Swedish) have each launched new accountable care organizations (ACOs), contracting directly with employers. These direct-contract ACOs, the first in the Seattle market, will be offered to employees at the beginning of next year. The accountable care agreements do not involve an insurance company and place risk for the cost of care solely on the participating providers, which include a mix of Providence-Swedish and UW Medicine’s owned and affiliated hospitals and clinics.
Other key findings from the Seattle Market Overview
Aviation giant Boeing is the first large employer in the market to sign on for both ACO networks, which will be offered to non-union members and select unionized employees. Other employers are expected to contract with the health systems prior to January 2015.
The UW Medicine Accountable Care Network features a mix of hospitals within the Seattle market and in surrounding communities. The network includes Seattle Children’s Hospital and Seattle Cancer Care Alliance, both of which were left off the networks for most health insurance exchange policies.
The state’s exchange plans prominently featured narrow networks. After outcry from affected stakeholders, state Insurance Commissioner Mike Kreidler introduced new regulations requiring the submission of provider networks for approval, and the networks must include adequate access to specialists and community care providers. Insurers warn the regulations could lead to higher premiums, while hospitals argue that the new rule does not goes far enough to protect consumers.
Comments from Decision Resources Group Analyst Sarah Wilson:
“The introduction of direct-contract ACOs in the Seattle market is surprising, as the market has only begun fully embracing ACOs in the last year. Traditionally, Seattle health systems have shied away from bearing risk, so the market is now entering into a more advanced model of care. Franciscan Health, which was not included in a direct-contract ACO network, may feel pressure to form one to remain competitive in the market.”
“Boeing’s willingness to offer the new ACOs, as well as its traditional health plans, allows employees to select the coverage and network they prefer. UW Medicine may have a bigger draw as its ACO network includes providers that have been excluded from insurance networks.”
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Decision Resources Group’s Seattle ACO Spotlight Series report has also been updated to reflect ACO developments described above.
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