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Anthem partners with hospitals to create unique health plan

A pedestrain crosses a street at Cedars-Sinai Medical Center in Los Angeles on September 7, 2012 in California.
Cedars-Sinai Health System is one of the seven hospital groups partnering with Anthem to offer the Vivity health insurance plan.

Anthem Blue Cross launched a new health plan Wednesday in partnership with seven hospital systems that aims to provide an integrated health system to consumers while its providers share profits or losses.

The new system, called Anthem Blue Cross Vivity, is set up for the insurer and the healthcare providers to have a mutual financial stake in the venture. It's a departure from the traditional health insurance model, in which the insurer and the providers are in a more adversarial relationship, with each negotiating to get the best financial deal for itself. 

"The business model of old for hospitals has been to keep their beds full; under the new model the eight of us are successful only when we keep people healthy and out of hospital beds," said Pam Kehaly, west region president of Anthem Blue Cross.

Vivity will be available to businesses with 50 employees or more on October 1, and will go into effect in the new year.  CalPERS has already agreed to sign up to offer the plan to its 2,700 employees.

The hospital systems in the partnership are: Cedars-Sinai Health System, Good Samaritan Hospital, Huntington Memorial Hospital, MemorialCare Health System, PIH Health, Torrance Memorial Medical Center and the UCLA Health System.

For consumers the plan is intended to provide access to a wide network of primary care physicians and specialists, to provide an understandable financial model and access to easy navigation of the system, said Tom Priselac, president and CEO of Cedars-Sinai.

"The economics of healthcare for patients are oftentimes confusing and I think there is an effort here to simplify that," he said. "So the patient knows their out of pocket expenses in advance is limited to their co-pay that they may have for a particular service."

Under Vivity, consumers will only be responsible for premiums and co-pays and will not be required to pay a percentage for services rendered, as is common under other plans.

By moving away from the traditional fee-for-service model, the plan incentivizes providers to keep patients healthy and avoid unnecessary costs, said Anthem’s Kehaly.

"We can reduce waste, provide people with care from the top facilities in the nation, and do that in an integrated way," she said.

In the long run, the new system could evolve to the point that the providers pool resources and do away with duplicate services, Kehaly added.

David Feinberg, president of the UCLA Health System, said in the future the system could channel patients to the best places for certain services.

For instance, he said UCLA and Cedars are building a new rehabilitation hospital that could become the rehab center for Vivity.  Or community hospitals could become centers for certain procedures, while centers like UCLA take on specialized procedures.

"It’s also an important lesson for us to start experimenting with these types of care because we see this as the future," Feinberg said. "So even if we just broke even or lost a little money between now and a year or two from now but we learned a lot, I would count that as measure of success."

During the first year Anthem aims to keep the plan to 15,000 members so it can be more easily managed and evaluated.