Some health systems are getting out of the insurance business.
In the first weeks of 2024, two health systems announced plans to sell their health insurance subsidiaries. In February, Springfield, Mass.-based Baystate Health reached a deal to sell Health New England to Point32Health.
In January, Toledo, Ohio-based ProMedica said it planned to sell its insurance subsidiary, Paramount Health, to Medical Mutual of Ohio.
Baystate Health has around 180,000 members in Medicare, Medicaid and commercial, and Paramount Health has more than 77,000 members in Medicare Advantage, commercial, individual and short-term plans. Both are set to be acquired by larger nonprofit insurers. Point32Health and Medical Mutual of Ohio each have over 1 million members.
In a Feb. 15 news release, Point32Health said its acquisition of Health New England would improve its product offerings and expand its network.
"Preserving and enhancing strong, high-quality, not-for-profit health plans is critical for Massachusetts healthcare," said Cain Hayes, president of Point32Health.
ProMedica CEO Arturo Polizzi said in a Jan. 29 news release the system chose to divest its insurance business as ProMedica has "sharpened its focus on core health system operations."
In November, another system, Ascension Wisconsin, finalized a deal to sell all of its stake in Network Health to Froedtert Health. The Milwaukee-based system is now the sole owner of Network Health, which offers health plans in 23 Wisconsin counties.
At least one system-owned plan has shut down in the past year. In October, Fredericksburg, Va.-based Mary Washington Healthcare said it would not offer its Medicare Advantage plan in 2024. The plan had 2,800 members.
As more large payers snatch up providers, some hospital executives are promoting partnership over a "payvider" model.
Kevin Mahoney, CEO of the University of Pennsylvania Health System, part of Philadelphia-based Penn Medicine, told the Philadelphia Business Journal he will "beat insurance companies into the ground" to ensure patients get the best care.
"Health systems should not be an insurance company, we should partner with insurance companies like we have done with Independence Blue Cross where we are partners in population health [and share accountability for the healthcare of patients in a specific geographic region]. These kind[s] of things are a step in the right direction," Mr. Mahoney said.