November 22, 2023
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Fate of Dignity-Anthem gamble uncertain


By Stephanie Hoops

Employers nationwide have been migrating toward self-funded health plans ever since the Employee Retirement Income Security Act of 1974 exempted them from state regulation, but it’s not clear whether that trend will continue in the wake of Donald Trump’s victorious presidential race.

The Self-Insurance Institute of America is preparing blueprints for a potential revamping of the industry and how various scenarios might impact self-insurance. Still, “questions loom,” according to SIIA CEO Mike Ferguson.

Ferguson told me he expects companies will still see the benefit in self-funding, regardless of any changes to the Affordable Care Act under the new administration, especially in California, where regulations impose cost burdens not seen in other states.

“Cost factors are more significant for doing business in California so it makes sense to try to control costs where you can,” he said.

Indeed, California employers have increasingly moved toward self-funded options. Decision Resources Group data shows commercial self-insurance enrollment rising to nearly 7 million in 2016, up 9 percent from the prior year.

With cost-conscience employers upping the demand for self-funded options, Dignity Health recently teamed up with Anthem Blue Cross to begin selling a self-insurance product to large employers. Their tiered EPO/PPO health plans — available to groups with more than 101 employees — are designed to lower costs through an integrated care management system. Ventura County was chosen as the site of the Dignity-Anthem product launch.

Why Ventura County? The Southern California Integrated Care Network is based here and Dignity expects good things to come of its collaboration with SCICN. The physician network has matured since its introduction in 2013 and Dignity expects it will work well with Anthem’s care management team. Local physicians run SCICN and Dignity’s hospitals (St. John’s Regional Medical Center in Oxnard and St. John’s Pleasant Valley Hospital in Camarillo) fund its operations. The theoretical idea behind clinical integration is that by aligning, hospitals and physicians will improve quality, efficiency and value. Clinical integration also allows hospitals to grow market share by guaranteeing patient flow.

Dignity and Anthem planned to expand the sales region across the state in the 18 months that followed the May 2016 launch of their new product, but expansion of the program into other parts of California has yet to begin. Duncan Ross, Dignity Health’s vice president of employer relations, expects that will happen in the next 12-18 months.

“It is live in Ventura with our employees,” he said. “The initial data we’ve seen has been very positive. We are now working directly with brokers in the Ventura market and we’re looking for employers in 2017.”

Now that they’ve built it, will employers come? If the popularity of self-insurance grew, in part, as a way to sidestep certain standards imposed by the Affordable Care Act, what will happen if the law is repealed or replaced?

Only time will tell.

• Ventura County resident Stephanie Hoops is an analyst with Decision Resources Group, a health care analytics company.