Provider-Sponsored Risk: Where Are You on the Journey?

Provider-Sponsored Health Plans Go Beyond 80/20 Rule

While some health systems have begun sponsoring their own health plans, making that decision - or entering a shared-risk arrangement with non-provider sponsored plans - requires careful consideration and the examination of several factors. 

The number of PSHPs continues to increase, but they are still concentrated:

10 largest health plans account for 43% of 18M covered lives

Next 10 largest plans cover another 20% of lives

Conversely, 10 smallest plans represent only 1% of covered lives

Success Factors

Scale Matters
Plans with larger enrollments perform better than plans with lower enrollments: In general, small enrollments correlate to operating losses, high administrative costs, and poor financial performance.

Lines of Business Matter
Variability in performance among PSHPs is significantly impacted by the lines of business pursued and market conditions (opportunity).

Markets Matter
The relative scale (enrollment of non-PSHPs in markets where PSHPs compete is a major determinant of the success of the PSHP.

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