Providers’ Insurance Products Compete for Customers on the State Exchanges

In a recent article published in Modern Healthcare, a large hospital system in Texas announced their plans to enter into the health insurance market place. We see this happening not only occurring in Texas but throughout our nation and expect the trend will continue to grow.

One major reason for our expectation is that, slated to begin on Oct. 1, 2013, online markets or exchanges will be available for the purchase of health insurance by the public.  Aided by government subsidies to assist in affordability, consumers will have a bevy of options to choose from.

The good news for the country’s health systems is that this insurance explosion should increase the number of previously non-covered people who are now covered and seeking preventive and primary care. This has prompted the above-mentioned hospital systems to expand even further in the provision of health care, by creating their own health insurance products.

By doing so, the health systems can increase their presence in the marketplace and make attempts to create an additional revenue stream.  This comes at a time when the marketplace will be focused on keeping patient care ambulatory through better disease management and care coordination, thus emptying hospital inpatient beds.

The goal for providers by entering this insurance market is two pronged: 1) Insure these potential customers through these exchanges, and 2) Channel those patients into their own facilities.  This new customer base also enables providers' ability to manage care and costs, which results in a positive effect for consumers as providers can then offer lower insurance premiums.


Steven Bisciello is a Health Care Services Group Senior Manager experienced in revenue enhancement programs, health care litigation, compliance and physician practice management.

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