I am going down a rabbit hole as I am thinking about Integrated Delivery Networks (IDN). An IDN is an entity that owns an insurer and providers (usually hospitals are the flagship). I used to work at a large IDN, UPMC Health Plan.
I am trying to wrap my head around the impact of IDNs on competition and I am learning a lot from my last post and the responses on Twitter.
But I am still stuck in this rabbit hole and I want to think through a taxonomy of IDNs based on what their insurance arms and provider arms do with other entities. I am doing this to structure my own thoughts.
At the top left the insurer will contract with basically hospital or doctor who will take standard in-network rates while the hospital will contract with basically any insurer who meets their reservation rate. In this scenario, the IDN is effectively operating the provider arm and the payer arm at arms-length distance. The bottom right corner has the insurance arm only sending money to the provider arm and the provider arm only taking money from the owned payer arm. This gets us in the neighborhood of Kaiser and the Veterans’ Administration where there are fairly high walls around their own gardens.
When a provider contracts with anyone but the insurer only contracts with the owned providers, it is a branded narrow network. If the payer will contract with anyone but the hospital only contracts with the owned insurer, it is a huge company owned clinic. And then there are variations past these caricatures.
The two Pittsburgh IDNs have the insurers contracting with some non-owned providers. The owned hospitals also contract with some non-owned payers. This is a mixed case. I am not sure where I am going with this but I need to think through IDN’s and the way that I think is by writing.