New Trend Emerging: Hospitals Will Offer Their Own Health Insurance and Health Insurers Will Buy Hospitals

I guess this is a case of cutting out the middle man.

Dr. Kenneth L. Davis, CEO and  president of Mount Sinai Health System, the largest health care provider in the state of New York, said that starting next year, Mt. Sinai will begin offering its own Medicare Advantage plan. It will look for other opportunities to bring premium payments directly into the hospital system, rather than filtering them through insurance companies.

This also opens the door for Insurance Companies buying hospitals.

He noted that large insurer Wellpoint recently completed the acquisition of a health care company in California, apparently with an eye toward replicating the Kaiser model in some form.

I guess this starts the end-to-end care model of health care. You buy the insurance (hopefully at a discount) from your hospital on the Obamacare exchanges and then go to the hospital. Then the hospital charges you a co-pay and pays for the rest.

The hospital would be very good at figuring out how much they need to reimburse on what procedures. It seems to work well for Kaiser so I can see it working well for other groups of hospitals. The hospital wants to do good work so that their insurance will be sold at a good value. Also it provides built-in brand loyalty to certain hospitals as well. If you have Mt. Sinai brand insurance you will probably be going to Mt. Sinai over some other sawbones.

However, there needs to be checks in place if the insurance company owns a hospital. It would be interesting to see if certain things that are not cost effective or lose money suddenly are not done at that hospital. The article says that Mt. Sinai loses $14 million a year on mental health. Do you think WellPoint Hospital will have a money losing mental health ward? I guess these are the changes that Obamacare seems to have created.