Provider-Owned Health Plans Do Not Produce Cheaper Insurance Coverage
Although the fee-for-service model of reimbursement has been blamed as an reason for high healthcare costs in America, a report from HealthPocket found that eliminating this payment model in provider-owned health plans did not produce the cheapest health plans.
Although the fee-for-service model of reimbursement has been blamed as an reason for high healthcare costs in America, a
HealthPocket analyzed plans where the providers were also part of the organization that provided insurance coverage to patients. These provider-owned plans cover less than 10% of the privately insuranced market, but from 2012 to 2013, their membership growth increased faster than other plan types. However, after analyzing these plans, the researchers determined that the cheapest provider-owned health plan was still more expensive than the cheapest plan not owned by providers.
Bronze and gold provider-owned plans chosen through the Affordable Care Act's insurance exchanges were still 13% more expensive than the cheapest bronze and gold plans not owned by providers.
"The study findings are not an endorsement of the fee-for-service model but, rather, the findings call into question whether the elimination of the fee-for-service model would be sufficient to produce large reductions in health insurance costs on a nationwide basis," the authors concluded.
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