The recent merger between Spectrum Health and Beaumont Health creates the potential for Priority Health to make deeper inroads in the Southeast Michigan health insurance market.
That trek begins by forging deeper connections with Beaumont clinicians to further drive cost and quality improvements now that the blockbuster deal has closed, President Praveen Thadani said.
That’s always been Priority Health’s focus in working with any health system or care provider, Thadani told MiBiz. Having Beaumont and Spectrum combined in the larger BHSH System should enable that work to proceed quicker with a large care provider in Southeast Michigan that is now “deeply aligned with us,” he said.
Better coordination of care and advanced preventative primary care are just two areas that can benefit through tighter collaboration, Thadani said. As well, the merger between Spectrum and Beaumont that closed Feb. 1 can help Priority Health better understand the nuances and unique health issues of the Southeast Michigan market and population, he said.
“The ability to go deeper and partner with the clinicians and the Beaumont organization to really understand that market at a much deeper level will help us figure out those unique things we can do that will really support our desire to simplify the experience and improve the outcomes and ultimately improve the affordability,” Thadani said. “We want to do this with every health system. I simply think when you have somebody in the family, we have an ability to do that at a much more accelerated pace. We have an ability to have open, honest discussions (and) we have an ability to align financial incentives, as an example.”
Forging deeper connections with a major care provider in the market — Beaumont has eight hospitals in Southeast Michigan, 155 outpatient sites, nearly 5,000 physicians, and more than 33,000 employees — can begin to generate greater awareness among employers for Priority Health’s employee health coverage.
“We hope and expect that it will have a positive impact on our growth, but ultimately we are committed to making sure that it is growth for the greater good, benefiting all customers, members, employers, providers and, most importantly, the communities and the members that we serve and making them healthier,” Thadani said.
Gaining market share
The second-largest health plan in Michigan, Priority Health has 1.2 million members statewide enrolled in group, individual, Medicare and Medicaid health plans. About 350,000 members are in Southeast Michigan, where Priority Health holds about an 8-percent market share.
Priority Health’s chief rival, Blue Cross Blue Shield of Michigan, dominates the Detroit area for health coverage with a 70-percent market share across all insurance products, according to an annual report issued last fall by the American Medical Association. Health Alliance Plan, owned by Henry Ford Health System, holds a 9-percent market share in the Detroit metropolitan statistical area, according to the AMA report.
BHSH System President and CEO Tina Freese Decker also views the merger as giving Priority Health greater opportunity in Southeast Michigan.
“This allows us to potentially serve more people in Southeast Michigan, but also to create those value-oriented products (and) those innovative products to drive lower cost of care (and) higher quality,” Freese Decker said. “When we have the health plan and the physicians and the hospitals working together, we can really come up with some innovative products, and that’s what we’re looking to do.”
Priority Health entered the Southeast Michigan market in 2007 with the acquisition of Care Choices from Trinity Health.
The health plan extended deeper into the market two years ago with the acquisition of Detroit-based HMO Total Health Care that at the time had more than 91,000 members in Wayne, Oakland, Macomb and Genesee counties and portions of Monroe County who were enrolled in individual, group and Medicaid HMO policies.
The Spectrum-Beaumont merger created the largest in-state health system based in Michigan. BHSH System has 22 hospitals with more than 5,000 licensed beds, more than 300 outpatient locations, 11,500 affiliated and employed physicians, 64,000 employees, and revenues exceeding $13 billion.
“We’re focused on transforming health and really striving to achieve greater health equity and trying to create greater value, trying to improve the experience and the culture,” Freese Decker said.
“Our focus is on: How do we keep people out of our health system? How do we keep them healthy? How do we put new services in place such as digital services or at-home services so people can take care of their health without needing some of the inpatient, more extensive services that exist,” she said.
BHSH System will eventually offer Priority Health coverage as an option to all employees, Freese Decker said.
As executives proceed on integrating the two health systems, the respective Spectrum and Beaumont foundations will remain separate, she said.
“It’s really important that the local foundations will continue to support health care locally and will continue to have the commitment that the funds raised in local communities stay in those local communities. Of course we will have coordination, but we will have separate foundations,” Freese Decker said. “We want to make sure that our donors realize that the money they give stays locally. So, there’s coordination in the back-office functions, but locally we develop those relationships and we want to make sure we continue to foster those relationships.”