In October, Florida Hospital will launch into the health-insurance business, executives announced today.
In partnership with Health First Health Plans, the hospital system expects ultimately to offer both Medicare and private health insurance in as many as 11 Central Florida counties.
But it will start small, rolling out a Medicare Advantage plan to residents in Volusia and Flagler counties.
Seniors will be able to sign up for Florida Hospital Care Advantage by Oct. 15, when Medicare enrollment begins, said Mike Schultz, president and CEO of the Adventist Health System Florida Region, which includes Florida Hospital.
Across the country, more hospitals are entering the insurance business as they position themselves for changes under the health-care overhaul, say experts.
According to one industry survey, 28 percent of hospitals expect to launch their own health-insurance plan within the next five years. Currently, 18 percent of hospitals own insurance companies.
Health First is one of them. In addition to its for-profit health plan company, Health First has four nonprofit hospitals along the Space Coast.
"We were doing integrated delivery before it was fashionable," said Steve Johnson, Health First president and CEO, describing the trend for hospitals to coordinate all parts of the health-care delivery process.
The partnership is a way "to keep health care local, robust and sustainable," said Johnson.
Not everyone agrees.
"This is a trend starting in hospitals because they want to reduce overhead costs and increase profits," said Gerard Anderson, professor of health economics at the Johns Hopkins Bloomberg School of Public Health. "It's just another way for the hospital to control patients and increase revenues."
Testing the market
Under the new partnership, Florida Hospital will provide the brand, while Health First will provide the plan, executives said. Health First has been selling insurance for more than 25 years.
"Health First will administer the plan and run the intricacies behind the scenes, but it will look and feel like a plan administered by Florida Hospital," said Johnson.
After the Volusia and Flagler Medicare plans launch, the partnership plans to further extend Medicare Advantage and commercial plans to residents along the I-4 corridor from Daytona to Orlando and Tampa, said Schultz.
"We want to make sure this works in a limited market, and see if the community embraces it, then roll out in a logical fashion," said Johnson.
Those who sign up for the initial plan will be tied to five Florida Hospitals in Volusia and Flagler counties, and their affiliated physicians.
If the insurance plans expand to the 11 targeted counties, the provider network would grow to 23 hospitals in the Florida Hospital network.
"As an industry, we should have stepped forward to do this 10 or 15 years ago," said Johnson. "What we were doing wasn't sustainable."
Not the first time
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