A race against time: can CO-OPs and provider start-ups survive in the health insurance marketplaces?

> The Affordable Care Act's state and federal health insurance marketplaces, designed to provide affordable insurance coverage to individuals and small groups, are proving hostile territory to new market entrants. Efforts to inject competition into the marketplaces are being challenged by the wide-scale withdrawal o consumer-operated and oriented plans (CO-OPs). Meanwhile, premiums appear likely to increase for consumers as plans seek to balance medical losses.

Organizing for the 'second curve': combining health plans and provider systems.

Provider systems should ask four questions as they seek to incorporate health plans. Is the health plan on track to build critical mass quickly enough? Does the plan balance provider and health plan business priorities? Is the provider system willing to let its health plan compete freely in the market? Is the provider system's overall vision understood and backed internally?

Finding the 'sweet spot' in value-based contracts.

Health systems pursing value-based contracts should address six important considerations: The definition of value. Contracting goals. Cost of implementation.

Health care's new game changer. Thinking like a health plan.

The transition for hospitals from having only a provider's perspective to thinking more like a health plan will require strategic alignment on four fronts: Health plan alignment. Hospital and physician alignment. Leadership alignment.

Taking a fresh look at Medicaid.

Hospitals should evaluate four approaches to providing high-quality, cost-effective care for Medicaid patients: Continue to focus on strengthening primary care and improving cost efficiency in the current Medicaid market. Develop value-based, risk-sharing contracts with existing Medicaid managed care organizations. Partner with existing Medicaid managed care organizations to develop new products for targeted market segments.

Partnering with payers? Key lessons to keep in mind.

Key factors healthcare leaders might wish to consider when evaluating potential partnerships with payers include: Use of safeguards to prevent a payer from using benefit design to shift expected volume from high-revenue service lines or channels. Right to participate in narrow networks. Use of segment-specific language, which protects providers from payers that may try to extend a rate decrease from one patient segment to another.

Dual-eligible reform: a step toward population health management.

Improved care coordination for dual eligibles has the potential to reduce hospitalizations and eliminate duplicative services. Finding common ground on program design for dual eligibles has proved difficult, and for some programs to date, the cost of care management has balanced out savings achieved. Partnering with an experienced Medicaid managed care plan could be the best strategy for market entry for all but the most experienced integrated delivery systems and health systems.

Health insurance exchanges bring potential opportunities.

The introduction of the state health insurance exchanges, as provided for in the Affordable Care Act, has many strategic implications for healthcare providers: Unprecedented transparency; The "Walmart Effect", with patients playing a greater role as healthcare consumers; A rise in narrow networks spurred by low prices and narrow geographies; The potential end of the cross subsidy of Medicare and Medicaid by commercial plans; The possible end of not-for-profit status for hospitals