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plans and to compete with large national health insurers.311 Further, prior to value-based reimbursement and capitated payment models, health systems did not have the infrastructure or incentives to enter into the insurance business.312 With recent acquisitions of physician practices, rehabilitation centers, and skilled nursing facilities, systems now have access to a broad network of services.313 Managing population health and achieving success under value-based reimbursement models require scale.314 With scale, health systems will have a large risk pool that is necessary to sustain a health plan’s risk pool. Further, through consolidation, a health system will own various facilities that will attract consumers to a narrow network health plan. These examples demonstrate varying degrees of control, services, and financial strategies. Each model is unique while still delivering integrated and coordinated care through the traditional provider structure adapted to the not- so-traditional regulatory and industry changes. These models demonstrate the range of potential future health care delivery models.
The newly-proposed dual role of the health care provider as both an insurer and provider will yield different benefits, but also present new challenges to providers attempting to play in the insurance game. There are potential downsides to hospital health plans for consumers as well as health systems. One of those downsides is the narrow network health plan that provider- insurers will offer.315 A narrow network health plan limits the insured’s provider choice in exchange for a less-costly health plan premium.316 A narrow network refers to the network of providers that policy-holders of a specific health plan can use and visit.317 By offering fewer options to consumers, narrow networks
311. Susan Kelly, As U.S. Insurers Aim to Get Bigger, Hospitals Plan Entry, REUTERS (Oct. 13, 2015, 4:00 AM), http://www.reuters.com/article/us-usa-healthcare-hospitals- idUSKCN0S621E20151013. 312. Herman, More Health Systems, supra note 258. 313. Kelly, supra note 311. 314. Herman, More Health Systems, supra note 258. 315. Cf., Seth Trueger, Narrow Networks: The Result of Competition, Not the Barrier, MDAWARE.ORG (Oct. 13, 2013), http://mdaware.blogspot.com/2015/10/narrow-networks- result-of-competition.html (noting that narrow networks can actually be a positive aspect of the health care industry). Although narrow networks may reduce consumer choice, narrow networks do not demonstrate the lack of competition within the health care industry. Id. Instead, “[n]arrow networks are the result of competition and negotiation in the health insurance market.” Id. 316. Laura Summer, Health Plan Features: Implications of Narrow Networks and the Trade-Off Between Price and Choice, ACADEMYHEALTH, http://academyhealth.org/files/ HCFO/RIBrief0315.pdf (last visited Mar. 15, 2016). 317. David Blumenthal, Reflecting on Health Reform – Narrow Networks: Boom or