By some measures, the Denver metro area has one of the most competitive hospital markets in the country. Big health systems battle each year for supremacy in the billion-dollar market.
But now two of those heavyweight health systems — locally-based UCHealth and Utah-based Intermountain Healthcare — have decided to… collaborate? The systems earlier this month announced plans to form what is known as a “clinically integrated network.”
While this may sound like the hospital giants are planning to combine resources on the clinical side, it’s actually closer to forming one giant insurance network. Health systems will remain fragmented and continue to compete against each other to attract patients.
The new network will bring together approximately 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 it’s no coincidence that the systems announced that Intermountain’s SelectHealth insurance plan will hit the Colorado market for Medicare users as well as people who buy insurance on their own. SelectHealth will use the new network.
The respective leaders of UCHealth and Intermountain said the new clinically integrated network will improve the quality of health care people receive in Colorado while lowering the cost of that care.
“We are excited to partner with Intermountain to achieve these goals and give Coloradans a new option for their health insurance that prioritizes value-based care,” said Elizabeth Concordia, president and CEO of UCHealth, in a statement announcing the new network. “Together, we will help improve the overall health of the communities we serve.”
But consumer advocates are questioning whether that will actually happen or if it’s just another ploy by big health systems to get even bigger — and take more money for themselves.
“If they’re essentially using this as bargaining power or as a mechanism to avoid all other insurance carriers, that’s a cause for concern,” said Adam Fox, deputy director of the Colorado Consumer Health Initiative.
How the integrated network will work
The strength of the new network, according to UCHealth’s Michael Cancro, is its size.
Cancro is UCHealth’s chief strategy officer and also serves as president of an already existing UCHealth provider network called Coordinated Care Colorado. This 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 deep analysis, and it also provides better service.
“By bringing the organizations together, you have a pretty rich set of data and the ability to search and identify those patients who are at increased risk,” he said.
The key to reducing costs while improving care is early identification of patients whose health is going the wrong way, Cancro said. But with a smaller set of patients, he said, it can be difficult to have enough data to know which signals mean problems.
The volume of patients on the new network means it will collect enough data to perform more precise analysis, while also being able to hire more experts to do the job.
“Having access to data scientists, having access to large enough data sets to be able to say this is an indicator and this is not,” he said. “The more lives the merrier.”
The network will also be able to send alerts to people, letting them know they need to see a doctor about a problem or prompting them to come in for a check-up.
Cancro said the network will initially offer care to more than 300,000 patients. But Cancro said the goal is to have more insurers besides SelectHealth do deals with the new network, meaning it could attract more patients. He said it’s also possible that additional physician groups and medical providers could join the network.
Consumer advocates are skeptical of all these promises. To them, that sounds a lot like what hospital systems have been saying for years when they buy local hospitals or merge with other systems.
Like many other states, Colorado’s health care system is consolidating. And not always in favor of the patient’s pocket.
“Hospital consolidation is likely the largest driver of prices and operating margins in Colorado’s Front Range counties,” said a 2020 report by the Center for Economic and Policy Research.
The new clinically integrated network is not an exact analogue of the hospital merger. But there are enough similarities that people like Robert Smith, executive director of the Colorado Business Group on Health, will only believe its promises of lower prices and better care when they actually see it. Smith has long been a champion of reducing health care costs in Colorado.
“There is no evidence in the literature that these mergers improve outcomes,” Smith said. “Everybody has said that. But there is no evidence.”
What is SelectHealth and when will it launch?
Intermountain is a new player in the health care market in Colorado. Last year, it merged with SCL Health, giving it a presence in Colorado for the first time. SelectHealth is the insurance arm of Intermountain — and like Intermountain and UCHealth, it’s a nonprofit.
SelectHealth hopes to have plans available for sale in Colorado later this year for coverage that will begin in 2024. It intends to offer Medicare Advantage plans as well as insurance in the state’s individual insurance market, including through Connect for Health Colorado stock market.
UCHealth’s Cancro said SelectHealth will not sell insurance in every Colorado county. Instead, it will launch in about 16 to 18 counties, he said. These will be primarily along the front range to match the footprints of UCHealth and Intermountain for their health systems.
First, however, SelectHealth must get approval from the state’s insurance department. The department is reviewing SelectHealth’s application and will announce a decision later this year.
“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 and that they want to do business in our individual health insurance marketplace.”
Despite the apparent internal connection, UCHealth and Intermountain leaders said SelectHealth won’t get a good deal when it contracts with the new Clinically Integrated Network, or CIN, as executives call it.
“CIN will treat SelectHealth just like all payers here,” Mark Court, regional president of Intermountain Healthcare, said in a statement. “Any plan that aligns with CIN’s goals of delivering better patient experiences and health outcomes while reducing costs will be considered a valued partner.”
This story is from The Colorado Sun, a Denver-based journalist-owned news publication covering the state. For more information and to support The Colorado Sun, visit coloradosun.com. The Colorado Sun is a partner in the Colorado News Conservancy, owner of Colorado Community Media.