Tufts, Vanguard To Form New Health Plan

$88.5M federal loan to finance member-operated venture

Vanguard Health Systems Inc. and Tufts Medical Center have received $88.5 million in federal funds to launch a first-of-its-kind health plan in Massachusetts that will put members in control. The Minuteman Health Initiative will be a nonprofit insurance option available to individuals and small businesses. Members will govern the health plan, setting it apart from other plans in the market.

Tufts and Vanguard, operator of St. Vincent Hospital in Worcester, won an $88.5 million loan from the Centers for Medicare and Medicaid Services. The funding comes through an initiative in the federal Affordable Care Act.

“The intention here is to start a consumer-focused, member-driven new health plan in Massachusetts,” Eric Beyer, president and chief executive of Tufts Medical Center, said in a conference call with reporters yesterday.

Though the new health plan is being developed by Tufts and Vanguard, it will be available through a broader network of providers. Seventeen hospitals have already signed letters of support for the new plan, Tufts and Vanguard executives said.

The Minuteman health plan must be approved by the state Division of Insurance. It is slated to be on the market beginning in January 2014.Tufts and Vanguard billed the plan as affordable and transparent.

“We’ll be sharing information back and forth in a very transparent way,” said Eric G. Wexler, head of St. Vincent Hospital and president of Vanguard in New England.

Mr. Beyer said the plan would be more affordable for members because of efficiencies that create lower administrative costs, and because of its rate structure.

The 2010 Affordable Care Act created a new type of private nonprofit health insurer, called a consumer operated and oriented plan, or co-op. To date, the Centers for Medicare and Medicaid Services has awarded nearly $1.6 billion to 20 co-ops in 20 states. CMS said it will closely monitor the plans to make sure they’re providing affordable, high-quality insurance.

“Co-ops will promote competition and give consumers more health insurance choices,” Marilyn Tavenner, CMS acting administrator, said in a news release.

As a co-op, the Minuteman plan will depend on member involvement, in everything from finances to health and wellness programs.

“Their involvement in the development of those programs makes it a lot more effective,” said Dr. Jeff Lasker, CEO of New England Quality Care Alliance, the Tufts physician network.

Tufts and Vanguard are calling the new plan Minuteman but indicated that the name could change before the product launches.

Article by Priyanka Dayal McCluskey TELEGRAM & GAZETTE STAFF