In it Together: Emerging Joint Venture Structures for Hospitals and Insurers
Following the passage of the Affordable Care Act (the ACA), hospitals and physician practice groups, on the one hand, and health insurance and managed care companies, on the other hand, increasingly have focused on lowering health care delivery costs and better aligning their respective interests. These discussions have included, among other things, strategies for sharing profits (and downside risk) related to the utilization of health care services and improving quality of care and patient outcomes through better clinical integration and coordination.
Two of the most recent innovative risk sharing arrangements involve joint ventures between health care providers and insurers. These arrangements may be referred to as contractual joint ventures and legal entity joint ventures. Although employing different contractual structures, both arrangements provide effective methods for sharing profits and losses and increasing coordination of care through the creation of new, branded health plan products and services that can be offered to the public at below-market insurance premium rates.
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