Seattle Health Systems Launch New Accountable Care Organizations for Employers

BURLINGTON, Mass., Aug. 4, 2014 /PRNewswire/ -- Decision Resources Group finds that University of Washington Medicine (UW Medicine) and Providence Health & Services-Swedish Health Services (Providence-Swedish) have each launched new accountable care organizations (ACOs), contracting directly with employers. These direct-contract ACOs, the first in the Seattle market, will be offered to employees at the beginning of next year. The accountable care agreements do not involve an insurance company and place risk for the cost of care solely on the participating providers, which include a mix of Providence-Swedish and UW Medicine's owned and affiliated hospitals and clinics.

Other key findings from the Seattle Market Overview report:

• Aviation giant Boeing is the first large employer in the market to sign on for both ACO networks, which will be offered to non-union members and select unionized employees. Other employers are expected to contract with the health systems prior to January 2015. 
• The UW Medicine Accountable Care Network features a mix of hospitals within the Seattle market and in surrounding communities. The network includes Seattle Children's Hospital and Seattle Cancer Care Alliance, both of which were left off the networks for most health insurance exchange policies.     
• The state's exchange plans prominently featured narrow networks. After outcry from affected stakeholders, state Insurance Commissioner Mike Kreidler introduced new regulations requiring the submission of provider networks for approval, and the networks must include adequate access to specialists and community care providers. Insurers warn the regulations could lead to higher premiums, while hospitals argue that the new rule does not goes far enough to protect consumers.   

Comments from Decision Resources Group Analyst Sarah Wilson:

• "The introduction of direct-contract ACOs in the Seattle market is surprising, as the market has only begun fully embracing ACOs in the last year. Traditionally, Seattle health systems have shied away from bearing risk, so the market is now entering into a more advanced model of care. Franciscan Health, which was not included in a direct-contract ACO network, may feel pressure to form one to remain competitive in the market."
• "Boeing's willingness to offer the new ACOs, as well as its traditional health plans, allows employees to select the coverage and network they prefer. UW Medicine may have a bigger draw as its ACO network includes providers that have been excluded from insurance networks."

Additional Resources:

• Decision Resources Group's Seattle ACO Spotlight Series report has also been updated to reflect ACO developments described above.

About Market Overviews

NEW ACO Spotlights, featuring market-specific insight and implication dashboards, are now part of Market Overviews.

Market Overviews provide a detailed analysis of local healthcare market drivers in 87 of the nation's most dynamic metro areas. The reports are updated throughout the year based on market events, providing the only healthcare dynamics analysis that continuously examines all healthcare market drivers in a region to help industry professionals quickly gain market expertise. Please visit www.hl-isy.com/Market-Overviews for more information.

About Decision Resources Group
Decision Resources Group offers best-in-class, high-value information and insights on critical issues within the healthcare industry. DRG insights and analysis on the U.S. managed care market are powered by HealthLeaders-InterStudy. Clients rely on this analysis and data to make informed decisions. Find out more at www.hl-isy.com and www.DecisionResourcesGroup.com.

All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders.

For more information, contact:

Decision Resources Group
Christopher Comfort
781-993-2597
[email protected]

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SOURCE Decision Resources Group

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