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Progress: WVU Medicine’s Peak Health insurance offers lower healthcare costs by connecting payer, providers and patients

MORGANTOWN — Through its new medical insurance provider, Peak Health, WVU Medicine and its partners are pursuing a way to offer more-efficient care at a lower price — for providers and patients.

Peak Health formed a couple years ago, President Ben Gerber said. The self-insured medical insurance plan began handling WVU Medicine’s 33,000 employees on Jan. 1.

The first provider-led health plan in West Virginia now has three minority co-owners — Mountain Health, Marshall Health and Valley Health — and will begin offering coverage to them on Jan. 1, 2024. Marshall Health and Mountain Health Network told The Dominion Post that they have the option to enroll their employees by July 2025.

On that same date, Peak Health will begin offering Medicare Advantage in the counties where it operates; those plans will be offered to anyone Medicare-eligible in those counties.

Peak Health, Gerber said, was formed to align the insurance payer side with the way the providers are reimbursed. Self-funded plans typically pay a third-party administrator to handle the benefits; Peak Health can deliver the same network as a bigger plan at a lower administrative fee. “We think that’s a big win for employers.”

The concept is unusual in today’s market, but not new. An article on Peak Health’s website explains that the business model is based on one pioneered in 1945 by Oakland, Calif.-based Kaiser Permanente, which operates a nonprofit health insurance plan, medical practice groups and the biggest nonprofit health system in the U.S.

In 2021, Kaiser reported operating revenue of $33.25 billion, the article says. Kaiser’s integrated business groups operate as a single nonprofit entity, rather than having affiliate business groups competing against each other for the same health care dollar.

The vertical integration allows for better use of resources, he said, and eliminates unnecessary care, with savings passed on to employers and customers, Gerber told The Dominion Post. “By doing that, we can really deliver more-efficient care, invest in population health resources that are really going to advance care and improve care and the cost of health care in the state.”

WVUM President and CEO Albert Wright said in the article, “Operating as a single unit allows for cost savings, which translated into an average premium reduction of 12% for WVU Medicine employees who were previously covered by a Pittsburgh-based Highmark plan.

Peak Health’s growth is also healthy for the state as a whole, Gerber told The Dominion Post. West Virginia has seen large health systems move operations out of state, with an accompanying outflow of jobs. This new company will bring close to 100 new jobs to Morgantown, and as it expands, several hundred more new jobs.

And continued growth will provide continued benefits, he said. From a population health perspective, the more partners they bring in, the more scale they can achieve and more savings to pass on to employers and consumers.

They expect several satellite offices to pop up across the state, Gerber said, but most jobs will be located at the Peak Health office on Van Voorhis Road.

Peak Health’s rapid impact led Morgantown Area Partnership this spring to name the company its New Business of the Year.

Wright told The Dominion Post, “It’s very important for us to be innovative as both the payer and a provider of health care to come up with new payment models that allow us to create complete incentives around keeping people healthy and in the lowest cost setting possible.

“If we can do that and create jobs and better health care here in West Virginia,” he said, “I think that’s a really cool thing and something we can all be proud of.”

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