To control costs, insurers open their own clinics

Crawford Frazer

With health care costs rising, seniors are feeling the pinch -- and so are the insurance companies that provide their coverage. This is leading to a new trend: Insurance companies opening their own health care clinics to keep costs down.

What's the problem?

The answer is one word: cost. But there are several roots for that problem. As Kaiser Health News points out, the federal government will cut $145 billion in payments to Medicare Advantage plans (plans offered by private insurers approved by Medicare) over the next 10 years. Because these plans depend on a fixed amount of government money, insurance companies can't just raise their premiums to make them profitable. As a result, insurers who provide Medicare Advantage coverage have to find a way to cover their clients in a more affordable manner.

Digging deeper

Because elderly patients tend to need more medical care, relatively simple procedures often are treated in emergency rooms, which, because of their high overhead costs, usually provide expensive care. Even an IV fluid replacement might cost thousands of dollars if the patient has to stay overnight, according to the American Academy of Urgent Care Medicine.

So instead, some insurers are investing in their own clinics. Because the clinics specialize in only non-emergency care and are run by the insurance companies themselves, insurers can control costs. For example, Bravo Health, a Medicare Advantage provider, opened its own Bravo Health Advanced Care Center, with locations in Baltimore and Philadelphia.

The center focuses on preventive care and treatment of chronic conditions, according to its website. No appointment is necessary for immediate health issues like dehydration, minor injuries and shortness of breath. The center also coordinates with primary care doctors to provide treatment for complex health issues like heart disease, arthritis and diabetes.

Will the plan work?

The success of insurer-run clinics relies on patients opting to use them instead of emergency rooms. Bravo Health Advance Care Center touts its shorter wait times and the snacks it serves in the waiting area. And CareOregon, a nonprofit health plan that operates several Oregon clinics, has multilingual clinicians to attract lower-income immigrants.

The concern remains that in an effort to cut costs, insurers will decrease the quality of care for seniors, who already struggle with a variety of health insurance woes. In fact, according to Kaiser Health News, insurer-run clinics used to be quite common but fell in popularity during the 1990s. The reason? Patients felt restricted in their choice of doctors and worried they would be denied care if it cost their insurers too much. Yet with the baby boomers poised to swell the ranks of Medicare, such clinics might help prevent costs from spiraling out of control.