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Why St. Luke’s made its own HMO-style insurance plan for Idaho

Boise - Hospitals - 2021
Otto Kitsinger
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St. Luke’s Boise Medical Center on March 20, 2021. (Otto Kitsinger for Idaho Capital Sun)

St. Luke’s Health Plan debuted on Idaho exchange for 2023

St. Luke’s Health System grew rapidly over the past decade — acquiring and making deals with Idaho and Oregon medical practices and hospitals. As it grew, St. Luke’s executives described a master plan to curb the costs of health care — and to ensure that care actually makes people healthier.

One milestone in that plan arrived last fall: a new insurance company called St. Luke’s Health Plan.

“The thing that really is going to be different with our own health plan: you will have an integrated experience,” said St. Luke’s Health Plan President Matt Wolff. “I think that’s a major hurdle that causes a lot of friction, a lot of dissatisfaction. And frankly, I don’t think it helps us grow trust in the community.”

The plan is similar in some ways to HMOs like Kaiser Permanente. People with the St. Luke’s insurance card will only be able to get health care services from facilities and health care providers that belong to the St. Luke’s network — which includes St. Luke’s and other independent providers. It differs from other HMOs, too. For one thing, patients won’t always need referrals from their primary care provider to see a specialist, Wolff said.

He said St. Luke’s Health Plan promises to be more streamlined to keep patients from getting stuck in Kafka-esque red tape as they try to get healthy.

Patients won’t get caught between their health insurance company and their doctor when the two disagree, he said.

The main way it does this, Wolff said, is to leave it up to medical providers to decide what is or isn’t medically necessary. That eliminates the need for “prior authorizations” — the process for insurance companies to approve or deny medical care before it happens.

But there’s an internal control on those decisions to control spending, he said: the providers themselves are wholly responsible for the financial and health outcomes of their patients.

2023 will test St. Luke’s Health Plan concept

Ten years ago, the St. Luke’s system brought another insurance company into Idaho with what it called “a unique strategic alliance.” It partnered with Select Health, a Utah nonprofit insurer, to launch a St. Luke’s-centric plan. That plan from Select Health was, and continued to be, popular with consumers.

The overarching idea of that plan was to reward St. Luke’s and its providers when they made smarter decisions. If they could keep patients healthy, out of the hospital and off costly prescription drugs — thus controlling the costs for everyone — St. Luke’s and its providers could see monetary rewards.

Five years into that plan, the Idaho Statesman reported that “St. Luke’s has yet to deliver on its promised savings in insurance premiums.”

Officials said in 2017 that it was “too soon to tell whether they can change how health care is paid for and meet their goals,” but they believed they were on the right track, the Statesman reported.

Wolff said the new health plan’s schematic is built on the lessons of that and other “value based” insurance arrangements — which, in 2012, were a somewhat novel approach but are now very common in Idaho.

“Although people may talk about integration of having the providers making the decisions, literally that is the case in our model. The St. Luke’s providers and (health care team) ultimately are the ones that are going to say whether these procedures, these visits are necessary or not,” Wolff said. “Providers and the care teams are 100% accountable for clinical and financial outcomes. It doesn’t mean that they’re necessarily going to have to do things that aren’t in line with the care that they think is best, but it does (evaluate the health care) quality of the population, the outcomes in the population, together with a financial responsibility.”

St. Luke’s: Health plan not a prelude to shutting out competitors

St. Luke’s has faced criticism and even an antitrust lawsuit a decade ago over its growing share of the Treasure Valley health care market.

Wolff said St. Luke’s has no intention of becoming a closed-off system, accessible only to those with a St. Luke’s insurance card. Among the insurers that competed with the St. Luke’s Health Plan on the exchange last fall, nearly all of them had St. Luke’s health care providers and hospitals in their network.

“Our strategy will still be, and always will be, a multi-payer strategy because we don’t believe that one single payer or one single arrangement like that has enough momentum to really change the market,” Wolff said.

What does it cost? That depends.

Health insurance premiums under the St. Luke’s Health Plan vary depending on a person’s age, where they live, and whether they qualify for a subsidy based on their income. Each person’s out-of-pocket costs will depend on what kind of medical care they need and which plan they choose — with “bronze,” “silver” and “gold” plans that represent a tradeoff between what you pay each month in premiums versus what you pay out of pocket to use the insurance.

All of the St. Luke’s plans feature a $0 copay for some basics like primary care office visits, on-demand virtual care, outpatient mental health care and prenatal care. They can prevent more costly and complex health problems down the road, Wolff said.

Other health insurers in Idaho also offer no-copay health care services, under the same philosophy.

The Affordable Care Act requires insurers to cover some preventive care at no cost to patients. An estimated 862,000 people in Idaho had $0 copay preventive care coverage through private insurance as of 2020, according to a U.S. Department of Health and Human Services report. Some of the St. Luke’s Health Plan benefits go beyond those basics.

However, the $0 copay doesn’t always mean a patient won’t have to pay a dime. For example, there is a $0 copay for maternity care. But, as the St. Luke’s Health Plan brochure explains, that copay applies to the bill for the OBGYN or other maternity care provider. It doesn’t apply to a facility’s own charges for labor and delivery, which, in a hospital, can run thousands of dollars or more.

The Idaho Capital Sun is a nonprofit news organization delivering accountability reporting on state government, politics and policy in the Gem state.