Hospitals nationwide are navigating increasingly burdensome insurer policies, incentivizing systems to seek innovative partners to address rising care costs and access issues.
Becker's sat down with Mercy's CEO Steve Mackin, along with Dave Thompson, senior vice president of population health and president of contracted revenue, to discuss how the St. Louis-based health system is navigating Medicare annual enrollment, commercial insurance tensions, and a new health plan partnership.
Editor's note: Answers have been edited for clarity.
Question: Given nationwide tensions between health systems and insurers right now, how are you maintaining and/or expanding the commercial plans you accept and work with?
Steve Mackin: This is a central part of Mercy's strategy. We acknowledge we can't go it alone — we need a payer partner who is innovative and brings all the capabilities a payer should, from adjudication to organizing plans for consumers and engaging with the broker community. For us, it always starts on the administrative side. We want a world where our providers can really engage consumers in a logical relationship and make sure the continuum of care is as frictionless as possible.
We can't do that alone without a payer who acknowledges the tension points we need to remove from the system. So, point number one in any discussion with a payer is the friction points that can either improve or impede the relationship.
Mercy has about 70,000 lives under our own self-funded plan, and we’ve sought to innovate and pioneer ways to engage them in their healthcare decisions and their relationships with Mercy providers. We use our own population as a test bed to push ideas, and if it works for us, it should work for other employer populations.
Q: Mercy has a new partnership with Centivo to bring another health insurance plan to Missouri. How did this come about, and why?
Dave Thompson: Centivo will be an extension of our tradition of high-quality, accessible, efficient healthcare with a great patient experience — and the ability to scale that. They have sophisticated underwriting capabilities, enabling them to offer a richer product to the market that reduces excessive deductibles, coinsurance, and copays, while also providing a lower total cost of care.
They can offer this either as a side-by-side option, where a large carrier serves as the primary insurer while also offering a Centivo option, or directly, which is becoming popular with many employers across our markets. The unique aspect of the model is a focus on primary care. They promote digital and virtual access points to care, aligning well with what Mercy has been building for the last two decades with our virtual, digital, and primary care capabilities.
We began this partnership in St. Louis, and we're currently providing this across Missouri and have plans to expand into Arkansas.
Q: What does this partnership mean for patients and employers on the ground?
DT: A lot of employers are seeking alternatives and looking for models that offer a more individualized set of options for those they cover, including family members. The broad networks, for the most part, have run their course. Many employers — and the consultants and brokers advising them — are increasingly aware of rising care costs and limited access to high-quality care. They're looking to innovators to bring new models to the forefront.
When we enter a market, Centivo and Mercy work with employers on how best to integrate this option into their benefits. For instance, if offered as a side-by-side option, a portion of the population may enroll in the first year, and we often see that number double over several years. Centivo has experience with this trend across the country, and brokers and consultants frequently bring this successful model to other employer clients. Ultimately, it’s the experience — and word of mouth — that make these models sustainable.
Q: How are you navigating the tumultuous Medicare Advantage market currently amid the enrollment period?
DT: The Medicare population — and those on the exchanges, Medicaid, or commercial — need innovative insurance models. The innovators we work with, whether it's Centivo or another payer, recognize the value we bring, and together we align the payment, administrative, and care models to achieve the best possible outcomes for our patients.
Right now, as we navigate the enrollment process, we’re focused on offering solid options because access to coverage — and good coverage options — are essential. Our providers give valuable feedback on which partners align well with us, which plays into our evaluation criteria as we continually assess who the best partners are for charting a new course for the patients we serve today and those we hope to serve in the future.
Nationally and locally, we're seeing some payers and others within the care continuum who simply aren’t adding value, and that’s where the opportunity lies: finding those who do and pushing forward with them. That’s how we navigate the future.
SM: It's also really about fine tuning how we perform with that population because it translates to even better performance with all of the other populations, including direct-to-employer or commercial. And so we really do focus on our performance in Medicare and Medicare Advantage because it's a place where you have to perform well and put a lot of effort into.
Q: Becker's spoke with Mercy's CFO earlier this year about caring for Medicare Advantage patients and the new two-midnight rule. What are you currently seeing from insurers on this front and how has it evolved?
DT: It's evolved with those that we've evolved with. There are certain payer partners that recognize the value that Mercy brings and don't get caught up in things like observation status versus inpatient status. Where we have aligned models with those partners, the friction really falls to the wayside, and where we don't is where the friction still exists. You see that with a lot of other systems nationally. We've been fortunate enough to run really hard at recognizing that we do have to manage the population as well, and part of the key to that is finding strong partners.
SM: This has a huge economic impact on systems like ours, and it's not an issue that we can turn a blind eye to. We want to do what's right for the patients, and we need payer partners who can help us resolve those issues effectively. Many have, some have not.
If you look at how our organization is set up, all of the clinical operating areas roll up to a lead physician who sits on the leadership team of Mercy. When we seek to improve the friction that exists, it's our physician leaders who are helping inform those approaches and techniques that we need to discuss with the payers. That's the approach that we take at Mercy.