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Three Critical Advantages of Provider-Sponsored Health Plans

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For decades, the health care industry has been working to evolve from volume-based care to value-based care. This transition prioritizes more efficient care focused on outcomes, rather than the number of patients served and services provided. One development advancing this shift is the increased formation of provider-sponsored health plans (PSPs).

Unlike traditional non-provider-sponsored plans, PSPs are health insurance organizations that are fully or majority owned by a health system, hospital or other provider entity. Since 1995, Johns Hopkins HealthCare (JHHC) has operated as a partnership between the Johns Hopkins Health System and the Johns Hopkins University School of Medicine. As a PSP, JHHC develops and administers innovative managed care programs and solutions, serving more than 700,000 lives.

The PSP model encompasses the entirety of the continuum of care, from funding to care delivery, connecting the payer and provider. This mutually vested interest enhances collaboration between the clinical and management sides and allows for full accountability for managed care results—across financial performance, Quality performance, and health outcomes. Aligned in this manner, PSPs possess a greater control over patient outcomes and cost of care.

There are three distinct benefits of the PSP model:

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1. Enhanced Patient Relationships
Members of a PSP are the same patients that health system clinicians see every day in their offices. This relationship facilitates trust and collaboration with members. By affiliation with a local health system, the PSP benefits from established familiarity, enhancing members’ adherence, self-care and better health outcomes.

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2. More Integrated Approach
PSPs are uniquely positioned with direct access to the health system. Using care coordination and care management strategies, PSP are able to more deftly assist with communication between primary care providers and specialists, and improve information sharing. This enhanced integration can improve the quality of the care and reduce costs, while providing an optimal experience to members and patients.

With easy and reliable access to claims and clinical data, PSPs can innovate quickly. PSPs derive strategic and operational insights from more sources than traditional insurers, including patient demographics, behaviors, and preferences; clinical and claims data; and thorough knowledge about health plans and providers. Leveraging these insights, plus the world-class research and discovery at Johns Hopkins Medicine, JHHC deploys improved interventions and new product designs with greater ease.

Some of the most challenging populations to serve, including the elderly and low-income, can be managed more successfully and efficiently by a PSP provider.

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3. Inherent Value-Based Care

PSPs break the constraints of fee-for-service payment models with an inherent value-based structure, incentivizing care to be delivered efficiently and effectively, including using virtual and team-based care. PSP payment incentives are better aligned for investing in preventive care and quality improvement. Bringing together payer and provider uncovers the shared objectives within health care utilization, striving to achieve the Triple Aim of ensuring the right services are provided at the right time and right cost, and in the right setting.

Health systems recognize that operating their own health plans gives them more control over health care management and spending, which can catalyze innovation for population health-based care models.

Learn More
JHHC leaders dive deeper into the dynamics and advantages of PSPs in the Health Care Collaborations podcast. Episodes explore the integrated health care landscape, discussing value-based care in pursuit of innovative health solutions and quality outcomes. Some example episodes are below: