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, on average.

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.