PacificSource, OHSU, Legacy Will Offer Group Plans

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Updated Tuesday at 5:45 p.m.

Three large health care companies, including the state’s only academic medical center, are banding together to offer group health plans in the Portland area.

PacificSource Health Plans, Oregon Health & Science University and Legacy Health announced Tuesday that they submitted their proposal to the state’s insurance commissioner this month for bronze, silver and gold plans in the small group market and for coverage for large employers starting in January 2020.

There is potentially a lot of money at stake. About 400,000 people are insured through large companies -- with 51 or more employees -- in the tri-county Portland area in the large group market. About an equal number are in company self-insured plans that use third party administrators.

Another 95,000 people in Multnomah, Clackamas and Washington counties are in small group plans for companies with 50 or fewer employees.

“A lot of people still have coverage through their employer,” said Dan Stevens, a PacificSource vice president and Oregon regional director.

The plans will give members access to more than 5,200 providers in the Legacy and OHSU networks in their clinics and 10 hospitals. On the Legacy side, they include: Legacy Emanuel Medical Center in North Portland, Legacy Good Samaritan Medical Center in Northwest Portland, Legacy Meridian Park Medical Center in Tualatin, Legacy Mount Hood Medical Center in Gresham, Legacy Salmon Creek Medical Center in Vancouver and Legacy Silverton Medical Center in Silverton. OHSU’s hospitals and partners include OHSU Hospital and Doernbecher Children’s Hospital in Southwest Portland, Adventist Health in Southeast Portland and Tuality Healthcare in Hillsboro.

This large network could give the companies an edge later this year when employers rethink their insurance options for next year.

“Having choice and access at an affordable price are important for anybody seeking health care,” said Brian Terrett, spokesman for Legacy. “And the one thing we know from our experience is that the wider the network of available physicians, the more attractive it is to people who are interested in buying plans.”

The two providers intend to work together -- not in competition, Stevens said.

“Employers are really attracted to integrated approaches,” Stevens added.

He said that Legacy and OHSU will share electronic health records and work together to curb costs for employers while improving outcomes for patients, with an emphasis on “value over volume.”

Health systems across the country are trying to move away from a fee-for-service model which has driven up health care costs in the United States. This country spends more than any other industrialized nation on health care, yet the United States often has worse outcomes.

Stevens said the partners plan to work together to offer clear cost targets to employers so they know how much money they’ll be spending on health care along with targets for health outcomes and customer satisfaction.

If they hit those targets, all three partners will share in the gain, Stevens said. If they miss them, they’ll all take a hit.

“(We) will view this as one population that we’re managing together and that we’re helping together,” Stevens said.

The deal builds upon existing relations among the three companies.

In 2016, Legacy bought a 50 percent stake in PacificSource. Each has six board members, and three people are appointed independently. As part of that deal, in 207 PacificSource became the third party administrator for Legacy’s self-insured health plan.

Legacy and OHSU have also worked together. They collaborated on the formation of Health Share, the only coordinated care organization in the Portland area serving Medicaid clients. OHSU is one of the partners in the Unity Center for Behavioral Health, the only psychiatric emergency center in Portland, and Legacy and OHSU are part of a cancer collaborative.

PacificSource is one of the smaller insurers in Oregon, covering a total of 230,000 people, Stevens said. It has 46,000 members in the Portland area, including 38,000 in the group market.

According to the state Department of Consumer and Business Services which oversees the insurance industry, PacificSource earned nearly $550 million in Oregon in premiums in 2016, the latest year available. That compares with Kaiser ($3.3 billion), Regence ($1.8 billion), Providence ($1.1 billion) and Moda ($904 million). Also in 2016, PacificSource’s net income dropped 3.8 percent.

The deal announced Tuesday is not exclusionary: All three partners will continue to work with others.

The Department of Consumer and Business Services will review the proposal -- along with others submitted by the May 15th deadline -- after the legislative session ends in June.

“We expect those products to be finalized in mid- to late July,” Stevens said.

You can reach Lynne Terry at [email protected].

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