In it Together -- Emerging Joint Venture Structures for Hospitals and Insurers

In the February 19, 2015 issue of BNA Health Law Reporter, Locke Lord lawyers Jon Biasetti and Benjamin Sykes provide a detailed look at recent efforts by hospitals, physician practice groups and health insurance and managed care companies to lower health care delivery costs and better align their respective interests following the passage of the Affordable Care Act.

These efforts have included, among other things, discussing strategies for sharing profits (and downside risk) related to the utilization of health care services and improving quality of care and patient outcomes through better clinical integration and coordination, the lawyers observed in their article.

Two of the most recent innovative risk sharing arrangements involve joint ventures between health care providers and insurers, Biasetti, Allis and Sykes noted. These arrangements may be referred to as contractual joint ventures and legal entity joint ventures. Although employing different contractual structures, both arrangements provide effective methods for sharing profits and losses and increasing coordination of care through the creation of new, branded health plan products and services that can be offered to the public at below-market insurance premium rates.