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Loren Hamel Loren Hamel

Spectrum-Lakeland deal could help Priority Health expand in SW Michigan

BY Saturday, July 21, 2018 11:22am

Spectrum Health’s potential acquisition of Lakeland Health could possibly provide a boost for Priority Health to pick up business in the Southwest Michigan market.

Priority Health lacks significant market share in the corner of the Lower Peninsula that makes up Lakeland Health’s home turf. Lakeland Health becoming part of Spectrum Health, which owns a 93.9 percent stake of Priority Health, could change the existing market dynamics, said health care consultant Mike La Penna of The La Penna Group Inc. in Grand Rapids.

La Penna envisions leaders in a tightknit business community around Benton Harbor and St. Joseph supporting Lakeland Health and encouraging employers to switch to Priority Health for their employee health benefits.

“I think Priority Health can make tremen dous strides down there because now they’re being introduced by everybody,” he said. “This is going to create a great base for Priority to expand and have an impact on that market.”

The American Medical Association’s 2017 annual report on health plan market share across the nation does not include Priority Health among the top two group health insurance plans in the Niles-Benton Harbor metropolitan statistical area. Those positions go to Blue Cross Blue Shield of Michigan with a 60-percent market share and Detroit-based Henry Ford Health System’s Health Alliance Plan at 13 percent.

Priority Health easily leads the Niles- Benton Harbor MSA for individual health policies sold on the public exchange with 87 percent of the market, versus Blue Cross Blue Shield’s 13 percent.

The second-largest health plan in Michigan with nearly 800,000 members, Priority Health counts about 30,000 members across all products lines — group and individual policies — in the four-county region that includes Berrien, Cass, St. Joseph and Van Buren counties.

Spectrum Health’s majority ownership of a leading health plan in the state adds to the benefits for Lakeland Health if the acquisition goes through.

Lakeland Health President and CEO Loren Hamel cites the potential to collaborate with Priority Health as the organization, like all care providers, adjusts to a new style of value-based reimbursement to contain costs.

“We are committed to redesign health care in a way that makes it more affordable. It is markedly easier to do that when you are doing that on very close and trusting collaboration with a health plan, and to have a health plan in the family is a significant advantage to any health care organization that is working to redesign that health care process to make it more affordable,” Hamel said. “We’ll be able to redesign health care, I believe, more rapidly and more efficiently by having that health plan in the family.”

Read 7799 times Last modified on Sunday, 22 July 2018 16:51