By some measures, the Denver metro area has one of the most competitive hospital markets in the country. Large health systems duke it out every year for supremacy in the multibillion-dollar marketplace.
But now, two of those heavyweight health systems — locally based UCHealth and Utah-based Intermountain Healthcare — have decided to … cooperate? The systems earlier this month announced plans to form what is known as a “clinically integrated network.”
While that may sound like the hospital giants are planning to combine resources on the clinical side, it’s actually more akin to forming one giant insurance network. The health systems will remain separate, and they will continue to compete against one another to attract patients.
The new network will bring together roughly 700 primary care physicians, hundreds of clinics and dozens of hospitals — all available and in network for consumers whose health insurance contracts with the new clinically integrated network. And, not coincidentally, the systems announced that Intermountain’s SelectHealth insurance plan will jump into the market in Colorado for Medicare consumers as well as people who buy insurance on their own. SelectHealth will utilize the new network.
UCHealth’s and Intermountain’s respective leaders said the new clinically integrated network will improve the quality of health care that people receive in Colorado while reducing the costs of that care.
“We are excited to partner with Intermountain to advance these goals and to give Coloradans a new option for their health insurance that prioritizes value-based care,” Elizabeth Concordia, UCHealth’s president and CEO, said in a statement announcing the new network. “Together, we will help improve the overall health of the communities we serve.”
But consumer advocates question whether that will actually happen or whether this is another play by large health systems to get even larger — and take more money for themselves.
“If they’re essentially using this as negotiating power or as a mechanism to shirk all other insurance carriers, that’s a concern,” said Adam Fox, the deputy director of the Colorado Consumer Health Initiative.
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How the clinically integrated network would, um, work
The power of the new network, according to UCHealth’s Michael Cancro, is in its size.
Cancro is UCHealth’s chief strategy officer and he also serves as the president of an already-existing UCHealth provider network called Coordinated Care Colorado. That network will merge with Intermountain’s Colorado Quality Care Network to form the new clinically integrated network. The new network will operate as its own company.
Cancro said this merger does one really important thing: It gives the new network enough patients to start doing some in-depth analyses and also provide better service.
“By bringing the organizations together, you have a pretty vast trove of data as well as the capability to look and identify those patients who are rising risks,” he said.
The key to reducing costs while improving care is to identify patients early whose health is heading down the wrong path, Cancro said. But, with a smaller pool of patients, he said it can be difficult to have enough data to know which signals mean trouble.
The patient volume of the new network means it will gather enough data to conduct more precise analysis, while also being able to hire more experts to do that work.
“Having access to data scientists, having access to large enough datasets to be able to say that this is an indicator and this is not,” he said. “The more lives, the better.”
The network will also be able to send out alerts to people, letting them know they need to see a doctor about an issue or giving them a nudge to come in for a checkup.
Cancro said the network will initially offer care to more than 300,000 patients. But Cancro said the goal is for more insurers besides SelectHealth to strike deals with the new network, meaning it could bring in more patients. He said it’s also possible that additional doctors’ groups and medical providers could join the network.
Consumer groups hear echoes of hospital mergers
Consumer advocates are skeptical of all these promises. To them, this sounds an awful lot like what hospital systems have said for years when buying up local hospitals or merging with other systems.
As in many other states, Colorado’s health care system has been consolidating. And not always to the benefit of the patient’s pocketbook.
“Hospital consolidation is likely the biggest driver of prices and operating margins in Colorado’s Front Range counties,” a 2020 report from the Center for Economic and Policy Research stated.
The new clinically integrated network isn’t an exact analogue to a hospital merger. But it has enough similarities that folks like Robert Smith, the executive director of the Colorado Business Group on Health, will believe its promises of lower prices and better care only when he actually sees it. Smith has long been a champion of reducing health care costs in Colorado.
“There’s no evidence in the literature that these mergers improve outcomes,” Smith said. “They’ve all said that. But there’s no evidence.”
What is SelectHealth and when will it launch?
Intermountain is a new player in Colorado’s health care market. Last year, it merged with SCL Health, giving it a presence in Colorado for the first time. SelectHealth is Intermountain’s insurance arm — and, like Intermountain and UCHealth, it is nonprofit.
SelectHealth hopes to have plans available for sale in Colorado at the end of this year for coverage that would begin in 2024. It intends to offer Medicare Advantage plans, as well as insurance in the state’s individual insurance market, including via the Connect for Health Colorado insurance exchange.
UCHealth’s Cancro said SelectHealth won’t sell insurance in every Colorado county. Instead, it will launch in around 16 to 18 counties, he said. Those will mostly be along the Front Range, to match UCHealth’s and Intermountain’s footprints for their health systems.
First, though, SelectHealth must receive approval from the state’s Division of Insurance. The division is reviewing SelectHealth’s application and will announce a decision later this year.
“The DOI is just learning about this joint venture, and we will need to further analyze what it entails and what impact it will have on the state’s health insurance market,” Colorado Insurance Commissioner Michael Conway said in a statement. “But, this announcement is a clear indication that Colorado continues to be a place where health insurance companies want to come to, and that they want to do business in our individual health insurance market.”
Despite the obvious inside connection, leaders of UCHealth and Intermountain said SelectHealth won’t be getting a sweetheart deal when it contracts with the new clinically integrated network, or CIN, as the executives refer to it.
“The CIN will treat SelectHealth just like all payers here,” Mark Korth, Intermountain Healthcare’s regional president, said in a statement. “Any plan that aligns with the CIN’s goals of ensuring a better patient experience and health outcomes while lowering costs will be considered a valuable partner.”