Allan Baumgarten Health Market Reviews & Consulting
The COVID-19 pandemic has underlined the importance of states in setting health policy, whether in responding to the pandemic or deciding how to implement the coverage expansion initiatives of the Affordable Care Act. Some embraced the extension of Medicaid eligibility and built their own health insurance exchanges. Others have rejected the opportunity to bring coverage to low-income households and billions of federal dollars to their safety net providers. Medicaid enrollment in several expansion states has grown by 10 to 15% since March, as people lost jobs and sought other kinds of coverage. And despite the large numbers of COVID-19 patients, health insurers have seen much lower claims and improved profits, based on data for the first nine months of 2020.
Our annual market reports and data sets are an invaluable source of insight into several state health care markets. We assemble data on health plans and provider systems and weave that analysis together with the perspectives of leaders in each market. By touring our web site, you can download samples of what is in those reports and data sets.
Through our consulting research, we apply our analysis of local markets to help pharmaceutical companies, health plans, provider organizations, health purchasers, investment firms and government agencies to address the business competition and strategy issues that they face. Below we describe some of the research we have recently completed for clients like the Robert Wood Johnson Foundation.
- Medicaid is now the largest line of business for HMOs in many states and they enjoyed significant, profitable growth in states that expanded eligibility under the ACA. These contracts represent a huge business opportunity for managed care companies, with states evaluating competitive bids for multi-year contracts worth billions in revenues. In September 2020, the Robert Wood Johnson Foundation released my research on how states contract with Medicaid managed care companies and oversee performance under those contracts. The report and a multi-year data set with financial and enrollment data on those companies is available here. A follow-up blog posting in Health Affairs examined how some states are looking to their Medicaid managed care contracts to help address state revenue shortfalls. A related piece published by the Altarum Healthcare Value Hub examined the results in states like Oregon, Colorado and Minnesota that are contracting with provider organizations for Medicaid. That paper, “Going Beyond Traditional Medicaid Managed Care Contracting,” can be downloaded here.
- Competitive pressures plus changes in Medicare payment are driving more consolidation for both hospitals and health plans. Companies like Centene and Molina have completed a series of acquisitions of regional Medicaid plans. The entry of two for-profit companies, Vanguard Health, now part of Tenet, and Prime Healthcare in the Detroit market has resulted in more vigorous competition for a shrinking pie of hospital care. See my data and comments in HealthLeaders and in the Detroit News. While a number of hospital M&A deals have been completed in recent years, others have been cancelled. In the last year, Beaumont Health in Detroit, itself the result of a large merger, has called off a planned acquisition of Summa Health in Ohio and then proposed and cancelled a merger with the Advocate Aurora system of Illinois and Wisconsin.
- Some systems are pursuing other strategies for extending their geographic reach, in some cases going beyond traditional local market boundaries. In 2017, the Robert Wood Johnson Foundation released my report analyzing the new generation of provider-sponsored health plans. A follow-up blog posting in Health Affairs focuses on the joint venture strategy used by most of the recent health plan start-ups. RWJF also supported a 2015 study of hospital consolidation and strategic partnerships for provider systems in New Jersey. My New Jersey report describes how MD Anderson Cancer Center is taking these national networks to a new, higher level by opening an M.D. Anderson satellite at Cooper University Medical Center in Camden, NJ and its fourth center at Baptist Hospital in Jacksonville, FL. Memorial Sloan Kettering is also building a network of cancer centers, most recently in Miami, in partnership with the Baptist Health system there.
- New coverage options through state exchanges are transforming the individual insurance markets in different states, as new competitors arrives and insurers compete on price and networks. In Florida, for example, enrollment in HMO individual plans grew by 900,000 in 18 months. While early losses and uncertainty about subsidies for consumer cost-sharing led some insurers to drop out of that market, several states took steps to stabilize their markets and new entrants are now completing in many states.
- Strong profits but risks for hospitals with their ambitious construction projects, seeking to expand their market share and extend their geographic reach. Lauren Silverman’s report for NPR describes how billions are being spent on hospital construction in north Texas and quotes me: “If I were a contractor, I would wake up every morning and thank G-d for the health care business.” Still, some systems were making plans to downsize their inpatient footprint before the pandemic, while others, having suffered large operating losses in 2020, are cutting staff and closing hospitals and clinic locations to stop the financial bleeding.
New State Market Reports for 2020 and 2019
Texas Health Market Review 2020 released March 9: “Texas Health Insurers Reap Strong Profits in First Nine Months of 2020; Hospitals Continue Consolidation and Profitability”
- Data from the report on hospitals and health plans appears in the weekly Economic Snapshot, “Obamacare’s Impacts,” in the Dallas Morning News
Minnesota Health Market Review 2020, Part Two, released January 6: “Health insurers report 16.5% more Medicaid enrollees, reduced claims and stronger profits in 2020; Minnesota hospitals posted continued strong net income in 2019.”
Ohio Health Market Review 2020 released November 20: “Health insurers profit from reduced utilization and claims; Hospital profitability grows in three largest metropolitan areas”
- Kaitlin Schroeder wrote in the Dayton Daily News: “CareSource sees uptick in Ohio Medicaid enrollment.” Click here to read
- Lydia Coutre wrote in Crains Cleveland Business: “Insuring a new market: Cleveland Clinic sets sights on employers with Aetna partnership.” Click here to read.
Minnesota Health Market Review 2020, Part One, released August 4: “Medicaid Health Plans Add 69,000 Enrollees in 2020; Profits for Minnesota Health Plans Drop in 2019, But Likely Strong in 2020”
- Christopher Snowbeck wrote in the Minneapolis StarTribune: “Allina-Aetna says its enrollment hits 12,000” Click here to view
Michigan Health Market Review 2020, Part One, released July 16, 2020: “Supersize Investment Revenues Boost Michigan Health Plans to Record Profits in 2019; Enrollment in Medicare Plans Grows by 15%”
Michigan Health Market Review 2019, Part Two, released May 7, 2020: “Net income and inpatient volume dropped sharply for Michigan hospitals in 2018; health insurers enjoyed stronger profits in 2019”
- Jay Greene wrote in Crain’s Detroit Business: “Report: Health plan profits drop first quarter, but experts project rose year ahead with more rebates.” Click here to read
If you missed the 2019 reports, you can get special pricing on the 2019 and 2020 reports. Click here to shop.
- Jay Greene wrote in Crain’s Detroit Business: “Report: Michigan health plans boost net income, hospital operating profits dip.” Click here to view
Florida Health Market Review 2019 was released December 13: “Florida hospitals continue expansion strategies, report higher profits; Consolidated HMOs improve profitability but lose members”
- Ben Comack wrote in the Miami Herald: “South Florida hospital chains and insurers are getting bigger. Is that good for patients?”
- Margie Manning wrote in the St. Petersburg Catalyst: “Report: More market power means bigger profits at Tampa-St. Petersburg hospitals.” Click here to read
- Ron Hurtibise wrote in the Sun-Sentinel: “Two new Obamacare insurers proposed for Florida is 2020.” Click here to read.
Michigan Health Market Review 2019, Part One released October 31. “Led by Blue Cross Blue Shield Companies, Michigan Health Plans Report Record Profits and Higher Enrollment”
Colorado Health Market Review 2019 released September 12: “Colorado health systems post record profits (again); Health insurers are profitable again and add members”
• John Ingold wrote in the Colorado Sun: “Denver-area hospitals made a record $2 billion in profits in 2018, according to a new report.” Click here to read.
To request a free sample of one of our state reports, click here
- Government Financial Officers Association annual conference in St. Louis, May 7. Speaking at session “Behind the Curtain: Price Transparency in Health Care.” Click here for more information
- Medicare Advantage Summit in Washington, DC, on May 17: Speaking at mini-summit: “Provider-Sponsored and Plan-Provider Joint Venture Medicare Advantage Plans.” Click here for more information
- Minnesota Health Action Group Member Meeting, June 21. Speaking on “The Changing Landscape for Health Care In Minnesota: Data and Insights for Employers.” Click here for more information
- I spoke Friday, January 20, to the monthly breakfast meeting of the Minnesota State Bar Association Health Law Section, hosted at the Mitchell Hamline School of Law Health Institute in St Paul. The topic: “Trends and Strategies for Minnesota Health Plans and Providers.” Click here to view the presentation slides
- I presented on July 28, 2017 to the Minnesota Medical Group Management Association Summer Conference in Breezy Point. Click here to view the presentation slides
- September 13, 2017: Presented for Minnesota Community Measurement Annual Seminar. Click here for information on MNCM. Click here to view the presentation slides
New Analysis of New Provider-Sponsored Health Plans
“Analysis of Integrated Delivery Systems and Provider-Sponsored Health Plans” published by the Robert Wood Johnson Foundation, June 2017. “Thirty-seven provider-sponsored health plans have formed since 2010 and only four were profitable in 2015.” Click here for a summary and to download the report and special data sets on more than 100 provider-sponsored health plans, old and new.
Analysis of Provider System Strategies in New Jersey
“Recent Changes in Primary Care Delivery and Health Provider Systems in New Jersey” published by the Robert Wood Johnson Foundation, June 2015. “The trend toward consolidation of providers is likely to continue and the importance of the strategic alliances is likely to grow.” Click here for a summary and to download the report and special data sets on hospitals and convenient care clinics in the state. Local coverage:
Andrew @Kitchenman wrote in NJSpotlight: “Larger Hospital Systems Loom in New Jersey’s Future, New Report Forecasts” – with interactive maps and data sets
Collen O’Dea wrote in NJSpotlight: “Mapping the Location of New Jersey’s Urgent Care and Retail Clinics” – with interactive maps and data sets
Lisa Ward wrote in Crain’s New York Business: “New York hospitals cast an acquisitive eye toward New Jersey; Wave of mergers shifts market across the Hudson.”
Reports and data sets now available for these states:
Want to see a sample market study? Several reports are available for free PDF download. Follow the links for:
- The Big Picture: Private and Public Health Insurance Markets in New York, by Peter Newell and Allan Baumgarten
- The Big Picture IV: New York’s Private and Public Insurance Markets, 2010, and the Affordable Care Act, released August 2012
- Arizona Health Care Market Report
- California Health Care Market Report
- Kentucky Health Care Market Report
We hope you will visit this site frequently. We will regularly add information about new reports as they are released. In addition, our Industry News section will put breaking news into the context that you need. Please contact us if you have questions or comments. To reach us send E-mail to: Baumg010@umn.edu
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