Texas Health Resources And Aetna Are Forming A Health Plan

Aetna and Texas Health Resources on Thursday announced the formation of a jointly owned, for-profit health plan company that will sell to individuals and employers in 14 counties throughout North Texas.

The deal is awaiting regulatory approval by the Texas Department of Insurance and, as such, specifics have yet to be worked out. But what we do know: the joint venture will be equally owned by the two and will likely launch with a provider base made up of Southwestern Health Resources, Texas Health’s previously announced network with UT Southwestern. It includes more than 3,000 physicians, 27 hospitals, and more than 300 outpatient sites, mostly in Tarrant and Dallas counties. In an interview, Texas Health CEO Barclay Berdan said the plan would likely include providers outside the network in order to meet any state-mandated adequacy requirements.

“This will be offered under a license that’s specific to the 14 counties in North Texas and we’re waiting for TDI to finish reviewing that application and make a determination,” Berdan said. “Once we have that, then we’ll feel comfortable about beginning to design products that will be offered as choices to a wide variety of individuals and employers across North Texas.”

Those counties include: Collin, Cooke, Dallas, Denton, Ellis, Hood, Hunt, Johnson, Kaufman, Parker, Rockwall, Somervell, Tarrant, and Wise. They’re hoping to have the plans available before the end of the year and active by Jan. 1, 2017. Aetna currently has about 700,000 members in those counties, good enough for market share of between 11 and 13 percent, said Michael Nelson, the Aetna market president for Texas. It’s not clear how the existing plans will be affected, if they will be at all. Nelson said it’s a priority for the company to not push current customers into the new plan, but maintained that it would likely speak for itself.

“Our goal is not to limit choice, it’s to provide better solutions,” he said. “So while I can’t speak to (possible changes) simply because it hasn’t been completely determined, the guiding principles are going to be solutions and choice.”

The new health plan will target both employers and individual consumers. Berdan and Nelson also anticipate featuring plans on the federal healthcare exchanges. The two also plan to focus on a value-based component, in part to help achieve Aetna’s goal of transitioning 75 percent of its contracts away from fee-for-service payment models. The two in January of 2013 launched an accountable care organization (an ACO), which is still active today.

The joint venture was first mentioned at a dinner at the end of last year, the two say. The negotiations moved quickly. The health plan will be a company separate of both existing entities and feature a new board, the makeup of which has yet to be determined. No other North Texas health system has paired with a national payer to form their own joint company. Texas Health Resources believes it will add another layer of convenience for their patient base, making it easier for them to navigate through the entire system as a whole and manage their continuum of care via one massive network.

There are similar arrangements—nimble health insurance startup Oscar only offers Baylor Scott & White in its provider network—but none go so far as to have created a new company that offers its own licensed insurance product.

Aetna has combined with health systems in other markets, particularly in Virginia where it combined with Inova Health System to form Innovation Health in 2012.

“I think it’s helpful that we have that experience to build on,” Nelson says, “but I think this is a Dallas-Fort Worth project and I’m sure we’ll have Dallas-Fort Worth solutions for it.”