New Health Alliance Introduced in New Jersey
According to Horizon’s Chief Executive Officer Richard Marino, the overall effect of the “OMNIA Health Alliance”, as the partnership is called, will be lower premiums, lower cost sharing, and higher value of care. In addition, Richard Marino was quoted, “So we’re looking to fundamentally change how care is delivered and financed in New Jersey by moving the system from fee-for-service to what we now call fee-for-value”.
Horizon Blue Cross Blue Shield of New Jersey
Horizon has provided health insurance coverage to over 3.8 million people throughout North, Central, and South Jersey since 1932 and is currently the state’s largest insurance provider. The company has intentions to collaborate with hospitals and physicians to improve the quality and experiences of patients while simultaneously lowering the total cost of care. These objectives came to fruition with the OMNIA Health Alliance. As a tax-exempt organization, Horizon strives to help make New Jersey a better, healthier place to live. In order to accomplish this goal, Horizon founded and formed the Horizon Foundation for New Jersey. The Horizon Foundation, since its establishment in 2004, has awarded more than 1,100 grants and $41 million in support of other tax-exempt organizations that have improved public health and the quality of life in the State of New Jersey.
The OMNIA Health Alliance
The overreaching goal of the OMNIA Health Alliance is to have its hospitals and physicians work together to provide individuals that are patients of OMNIA Health Alliance hospitals higher quality care at a lower cost; essentially to make the move from a fee-for-service to a fee-for-value model. Patients that are provided services at a Tier 1 hospital will pay lower out-of-pocket costs than those that are visiting a Tier 2 hospital or a hospital that does not participate with Horizon.
The members of the OMNIA Health Alliance include Summit Medical Group, P.A. and the following six healthcare systems:
- Atlantic Health System;
- Barnabas Health;
- Hackensack University Health Network;
- Hunterdon Healthcare;
- Inspira Health Network; and
- Robert Wood Johnson Health Network.
OMNIA Health Alliance developed its Tier 1 plan to fill certain geographic needs. Currently, the seven healthcare systems that will participate in the Tier 1 plan are:
- AtlantiCare Health System;
- Cape Regional Health System;
- Cooper University Health System;
- Englewood Hospital and Medical Center;
- Meridian Health;
- St. Joseph’s Healthcare System; and
- Princeton HealthCare System.
There are various other New Jersey hospitals that will be participating in the Horizon Tier 2 plan. However, those individuals receiving services at a Tier 2 hospital will be responsible for some co-pays and deductibles whereas those receiving services from a Tier 1 hospital will not be subject to these payments or balance bills.
In the traditional healthcare system, patients are already sick when they are being treated and hospitals and doctors are paid for the amount of services they provide these patients. The OMNIA Health Alliance will instead dedicate intellectual and financial resources to reverse this pattern by devoting time to develop approaches which aim to keep patients healthy through increased population health management and care that rewards better health outcomes, or quality of the care, and patient experiences while also lowering the cost of the care.
Already, Horizon members that were treated at these “patient-centered” practices as opposed to traditional practices experienced better quality care measures including a:
- 6 percent higher rate in improved diabetes control;
- 7 percent higher rate in cholesterol management for diabetic patients;
- 8 percent higher rate in colorectal cancer screenings; and
- 3 percent higher rate in breast cancer screenings.
These members treated at the patient-centered practices also experienced lower costs including an:
- 8 percent lower rate in hospital admissions;
- 5 percent lower rate in emergency room visits; and
- 9 percent lower total cost of care.
Horizon believes the OMNIA Health Alliance will positively impact various groups. For example, healthcare providers will be paying more for improved quality of care and reducing costs of multiple unnecessary services, businesses will have lower premiums on policies for their employees, policyholders will have smaller out-of-pocket costs, and Horizon itself will experience a shift in healthcare financing and lower the cost of healthcare.
Conclusion
Horizon’s OMNIA Health Alliance comes as a result of the frustration of industry leaders over the flaws in the traditional healthcare system that rewards providers financially for added fees but gives no benefits to ensuring a patient gets well faster. However, there are still those that fear that the OMNIA Health Alliance will not come without its problems.
Most significant is the fact that only Horizon members would receive benefits under the OMNIA Health Alliance. The OMNIA Health Alliance currently does not include other insurance networks which could potentially pose an issue in that Horizon will experience growth while other insurance networks could potentially be harmed from a financial perspective. State legislators are also expressing concerns indicating that the Tier 1 plan is “relatively unfair and did not give all hospitals a chance to participate”. In addition, patients may incur additional costs to travel to a Tier 1 hospital. The Alliance is also receiving criticism from hospitals that are not in either the Alliance or the Tier 1 plan. Moreover, a public hearing was held in Trenton, New Jersey. More developments are sure to follow. We will continue to monitor these developments as they occur.
With this shift from traditional healthcare practice to a patient-centered practice, Horizon and the participating healthcare systems are taking on increased risk and accountability; the most significant being a financial risk.
Horizon has launched an educational campaign to inform the public about the OMNIA Health Alliance. This can be accessed at www.HorizonBlue.com/OMNIA.
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Please contact a member of WS+B’s Healthcare Services Group at [email protected] for further questions or assistance.
The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your individual facts and circumstances.
