Swelling health plan losses bat­ter North­well’s earn­ings

Modern Healthcare - - REGIONAL NEWS - — Dave Barkholz

Health plan losses have struck an­other oth­er­wise healthy hos­pi­tal sys­tem: North­well Health.

New York City-based North­well posted an op­er­at­ing loss of $36.2 mil­lion in its fis­cal first quar­ter, ow­ing pre­dom­i­nantly to a $22.7 mil­lion loss by its CareCon­nect plan for in­di­vid­u­als and small groups and a $3.8 mil­lion loss by its other com­mer­cial plan.

North­well joins a litany of hos­pi­tal com­pa­nies that are try­ing to stem mount­ing losses at health plans that they started in re­cent years to try to di­ver­sify into man­aged care and cater to the newly in­sured un­der the Af­ford­able Care Act and Med­i­caid ex­pan­sions in 32 states.

Phoenix-based Ban­ner Health and Part­ners Health­Care Sys­tem in Bos­ton are try­ing to ad­just pre­mi­ums and cut costs that re­sulted in $100 mil­lion-plus losses by their health plans last year.

Catholic Health Ini­tia­tives of En­gle­wood, Colo., and Tenet Health­care Corp. in Dallas have their health plans for sale af­ter years of losses dragged down their fi­nan­cial per­for­mance.

North­well is count­ing on a pro­posed pre­mium in­crease and some reg­u­la­tory help for its money-los­ing CareCon­nect plan, North­well spokesman Terry Lynam said.

CareCon­nect’s main prob­lem is a $124 mil­lion risk-ad­just­ment pay­ment that North­well must pay the CMS this year for 2016 be­cause its mem­bers are deemed less sick than pop­u­la­tions served by other plans in New York, Lynam said. In the first quar­ter, the risk-ad­just­ment li­a­bil­ity was $29.4 mil­lion, a cost that dragged CareCon­nect into the red.

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