Texas Health, Aetna Name Ascension Health Plan Executive to Head Their Joint Venture

The health plan joint venture formed between Texas Health Resources and Aetna will be helmed by Jeffrey Cook, a longtime insurance executive who comes to Arlington from the nation’s largest nonprofit health system.

Cook was the national vice president of insurance and value-based strategy and reimbursement for the St. Louis.-based Ascension Health. He sat at the top of seven health plans, 20 accountable care organizations, 145 hospitals, and 6,000 employed physicians. Ascension is the parent company of Austin-based Seton Healthcare, where he was also responsible for managed care, the accountable care organization, the health plan, community insurance, charge master pricing, and hospital case management throughout Central Texas.

His new job will have him oversee the efforts of two entities emphasizing what they believe to be their strengths—clinical experience and insurance plan know-how—to contract directly with employers.

“What we’ve seen across the country is that there are a few health plans built organically by hospital systems that have worked and there have been many more that have failed,” Cook said in an interview on Monday. “What attracted me in this arrangement is having a joint venture where a hospital system has come together with a national health plan to give you the best of both worlds.”

He’s speaking of Aetna’s infrastructure and experience of insurance product development, claims processing, and customer service melding with Texas Health’s clinical foundation. The joint venture will include the full network of Southwestern Health Resources, which pairs THR’s primary care base with UT Southwestern’s specialists. The joint venture has filed for both an HMO license and an insurance license, which will allow them to bring their products to market. The arrangement is similar to others cropping up throughout the country. In November, Pittsburgh’s UPMC Health Plan paired with Reading Health to offer plans through Medicare Advantage and Medicaid as well as the individual, fully-insured, and self-insured markets. Indianapolis’ Anthem paired with Aurora Health Care back in April.

Texas Health’s won’t have the breadth of the Pennsylvania plan, at least not initially. Cook says they’ll start by targeting employers directly, so long as at least 50 to 60 percent of their employees are located in North Texas. Aetna currently insures about 700,000 residents in the 14 counties where the new venture will sell to, but many of those are part of national contracts with large employers elsewhere, like HP.  It’ll likely be a dual-choice: A high performing narrow network consisting primarily of Southwestern Health Resources providers for less, or a broader network that includes competitors for a higher fee. Medicare Advantage is a possibility “down the road,” as is the individual market, after they “see how the ACA shakes out,” Cook said.

“Increasing costs and quality pressures have created demands for new solutions that will really modernize the healthcare system,” said Barclay Berdan, the CEO of Texas Health Resources. “Aetna is really interested in the same activities and the same goals, so really aligning ourselves in building more sustainable value based models of care is what’s so attractive about this.”

Cook says both entities will make transparency a focus. The organization is still ironing out how best to reform its payment models to shift more toward value and away from volume, but it is planning on accepting more risk through bundle payments and cost of care payments. Those involve appending a total cost to the employee’s annual medical expenditures and sharing in any savings. He said the system would likely flag physicians who could improve their quality and efficiency metrics, and the joint venture would work with them to identify the issue and help them solve it.

“I think we’re at the point where we’ve got to start talking about getting very transparent around not only what things cost but which providers are more efficient than other providers,” he said. “In order for us to raise the bar for quality and transparency we’re going to have to be more transparent with consumers.”

Aetna has a company-wide goal to shift at least three-quarters of its contracts toward value-based arrangements by 2020. Cook has experience in all this. He led a similar initiative while serving as CEO of Seton Insurance Services. There, he created a joint venture with Cigna, a plan that launched in September. He started at Texas Health last week. Cook didn’t have any update on a timeline for when products would be rolled out, but the Texas Department of Insurance still has not granted the licensure. Berdan had hoped those would be in place to launch on Jan. 1, 2017. Cook says he expects the HMO license within 30 to 45 days.

In other insurance news, Texas Health remains at an impasse with Blue Cross Blue Shield of Texas. The two have until Dec. 31 to reach an agreement or THR’s hospitals will fall out of network.