“Blue Cross & Blue Shield of Illinois and Advocate Health Care are teaming up to offer a health plan that will be one of the cheapest options the insurer offers on and off the Obamacare exchange.
The plan, called BlueCare Direct, is a marriage of two giants. Blue Cross is the largest health insurer in the state, and Downers Grove-based Advocate is the largest health care system, with 12 hospitals and more than 4,000 doctors.
The BlueCare Direct network will include 250 of Advocate’s sites of care in Cook, DuPage, Lake, Kane and Will counties, including nine of its hospitals and a children’s hospital with two campuses. Enrollees can stick with their primary care doctor outside of Advocate’s system, but the plan will not cover it, said Dr. Lee Sacks, chief medical officer for Advocate.
The plan can be purchased on and off the Get Covered Illinois exchange and by small-group customers, said Dr. Opella Ernest, divisional senior vice president of health care delivery and chief medical officer for Blue Cross.
Ernest would not disclose exactly how the new plan’s price will compare to other plans. That information will be available once the window shopping period begins for 2016, which is expected any day.
RESPONDING TO CONSUMERS
This narrow-network plan is a sign of the times. The Obamacare exchange is preparing to enter its third year of enrollment, which begins Nov. 1, and carriers are listening to consumers. People tend to buy the cheapest plans, so insurers are beginning to offer narrower networks, which are often cheaper for both the insurance carrier and the consumer.
Enrollees will likely be drawn to the new and cheaper product, which could bring in a new patient base for Advocate and help Blue Cross maintain its grip on the market.
The BlueCare Direct plan was born out of a successful accountable care organization between Advocate and Blue Cross. The two giant organizations created the ACO five years ago to better align their financial incentives, and Sacks said the plan worked. The patients who had care across different health care systems often got caught in the middle of miscommunications, he said, or saw duplications in care.
“When care was within the Advocate network, there were fewer complications and it was lower cost,” he said. “So one of the thoughts was how do we create a plan that benefits that . . . (and) allows us to offer a lower price.”
This trend toward narrower networks is infiltrating the private exchange as well, said Steve Riedl, Chicago-based senior consulting actuary at New York-based consultancy Towers Watson.
“Sometimes the primary selection criteria is the price point, so if (an insurance carrier) can offer a competitive network at a very competitive price, they are more likely to get more people enrolled in their plan,” he said.
Just last week Hartford, Conn.-based Aetna announced a new partnership with four-hospital system Rush Health. The plan created through that partnership, called Aetna Whole Health Chicago, promises cheaper premiums than the insurer’s broadest plan at the cost of a narrower network.
That narrow network is what often brings the savings. Corralling patients’ care into the same health system often reduces redundancy and therefore reduces cost.
PRICE DRIVING CHOICES
More of these types of partnerships will likely surface as Obamacare continues to morph and define itself, said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University.
“We are hearing about more and more strategic partnerships between health plans and major provider systems,” said Corlette, who tracks national trends in health care. “Carriers are doing their market research and their analysis of the customers and what they are seeing is those customers are choosing plans based on price.”
Some carriers across the country are completely dropping their PPO plans—which typically allow enrollees to see a broad array of doctors and hospitals—in favor of narrower networks.
Last month, Blue Cross dropped its broadest plan sold to individuals and families on and off the exchange—called the Blue PPO. That had a network that included every hospital in the state. Enrollees covered by that plan will automatically be switched to a similar plan called the Blue Choice Preferred PPO, which will expand in 2016 to cover a little more than half of the state’s hospitals.
Blue Cross has not revealed whether Advocate will be included in the Blue Choice Preferred PPO in 2016. This will become evident once the window shopping period opens.
Advocate is set to merge with NorthShore University HealthSystem, the dominant network in the northern suburbs. NorthShore’s four hospitals will not be included in BlueCare Direct’s network until the merger is complete, Sacks said.