Network Health


How Is Network Health Cutting Its Premiums 15%?

Network Health president Christina Severin

Stop the presses! Somebody’s health insurance premiums are actually going down!!

Network Health, a managed care plan owned by Cambridge Health Alliance, has just announced that as of July 1, its Commonwealth Care plan will cut its premiums by 15%. The cut will bring Network Health to the same price level as Celticare, which, with about 15,000 members, had been the only “lowest cost” Commonwealth Care plan. Now both will share that designation.

The announcement is timed to appeal to potential members during the open-enrollment period for Commonwealth Care, the state-subsidized health insurance for people with low and moderate incomes. The Network Health plan currently serves about 44,000 members, who’ll generally see a drop in monthly premiums of between $10 and $30.

WBUR’s Martha Bebinger reported in April that “plans that cover moderate-income residents through Commonwealth Care are holding rates flat by limiting where patients can go, negotiating tougher contracts with hospitals, and with better oversight of the sickest patients.”

In fact, The Globe reported then that the proposed limited-network contract from Network Health excluded all hospitals in the (expensive) Partners HealthCare system except two.

But that was when the news was about holding rates flat. Network Health is going a step further with its 15% cut, and I asked the plan’s president, Christina Severin, today how they were doing it.

She declined to discuss “exclusions,” like the Partners limits reported by the Globe. In general, she attributed the rate cuts to three main factors:

-Network Health had already been working “extremely hard” to control costs. In the current fiscal year, it had already seen zero growth in its medical expenses.

-Of the 15% cut, 10 percent comes through a “high value network”

-and 5% through “medical expense management.”

In other words, 10% from using lower-cost (though still high quality) facilities and 5% through the kind of proactive “care management” that keeps patients in better shape and thus avoids unnecessary expenses.

Christina provided a few telling examples of Network Health’s efforts at care management: Continue reading

Breaking News: Cambridge Health Alliance, Network Health In Partnership Talks With Tufts

Jim Roosevelt of Tufts Health Plan

Cambridge Health Alliance and its managed care partner, Network Health, are talking to Tufts Health Plan about a “potential partnership,” in which Tufts would have a majority stake in the small insurance plan which covers 170,000 low and moderate-income residents who get free or subsidized insurance through the state.

WBUR’s Martha Bebinger reports:

Network Health is owned by Cambridge Health Alliance (CHA) and has recently been one of the few profitable parts of that network.

The deal would give CHA some much needed cash for Cambridge Hospital and help its health plan expand. The deal would let Tufts expand into the Medicaid market. Tufts CEO James Roosevelt, Jr. says the talks with Network Health are “completely separate from any conversations with (its proposed merger partner) Harvard Pilgrim Health Care.

Here’s the letter from Dennis Keefe, CEO, Cambridge Health Alliance, to employees:

TO: CHA Employees
FROM: Dennis Keefe
Date: February 23, 2011
RE: Important Announcement

Months ago, when I confirmed that we were exploring the possibilities of forming partnerships with other institutions I promised that I would try to inform you of developments when I could and asked that you ignore any rumors until you hear something directly from me.

Well, now I have something exciting to report and I think you’ll find it good news.

In addition to discussions about delivery system partners, we have been exploring strategic and financial partnerships for Network Health. We are currently at a stage in discussions with one potential partner, Tufts Health Plan that may result in us reaching a definitive agreement by which Tufts would make a significant ownership investment in Network Health, our managed care plan. While details are still being worked out, Tufts would likely become a majority owner of Network Health while CHA would retain an ongoing ownership interest.

If consummated, this partnership meets the criteria we set months ago to help guide our search for a partner and has many short-term and long-term benefits to both CHA and Network Health. While we have had multiple conversations with potential partners, the Tufts proposal rose to the top and contained the most beneficial elements including alignment of our respective missions, a local history, and commitment to the citizens and state agencies of Massachusetts. Continue reading