The agreement with Westshore Health Network, the physician-hospital organization of Mercy General Health Partners in Muskegon, reflects Aetna’s heightened interest in the West Michigan market. It comes six months after Aetna signed a participating agreement with Saint Mary’s Mercy Medical Center in Grand Rapids and its PHO, Advantage Health.
“We really think we have a lot of opportunity in that region of Michigan,” said Lynn Henderson, the Detroit-based vice president of sales for Aetna’s North Central Region that includes Michigan.
“We think we’ve got real opportunity out there,” Henderson said.
The participating agreement for Aetna’s preferred-provider organization (PPO) that took effect June 1 covers Westshore Health Network’s 224 primary-care and specialty physicians and Mercy General’s hospital on an in-network basis.
Leading Aetna to put more focus on West Michigan is a change in corporate strategy to a more product-oriented approach and the lack of any strong or dominating presence in the region by another large, national health plan, Henderson said. Aetna, one of the largest health insurers in the United States, has a nationwide presence that may appeal to large corporations based in West Michigan that have employees in multiple states.
“We’re hearing from them and their consultants that they are open to what else is out there,” Henderson said.
Aetna’s heightened focus on West Michigan is sure to give a boost to competition in the marketplace that, over time, will benefit employers that saw their health plan options dwindle in the last year when two health plans left the market, said Lody Zwarensteyn of the Alliance for Health.
With the new participating agreement in Muskegon and with Saint Mary’s in Grand Rapids, “Aetna is making a statement in a big way that they want to be a player in the West Michigan market,” Zwarensteyn said.
And the company has the ability to craft products and innovate, forcing competitors to react and “sharpen their pencils that much more,” he said.
“That’s exactly what the employer community would like to see,” Zwarensteyn said. “Clearly this is a case where we’ve got a limited number of vendors and the more the merrier. That kind of thing makes for a very healthy marketplace.”
Aetna’s agreement with Westshore Health Network comes after Care Choices and Physicians Health Plan (PHP) recently pulled out of the market.
Care Choices, a health plan owned by Mercy General and Saint Mary’s parent company Trinity Health, pulled its HMO product from all of West Michigan last year.
The move was preceded by the withdrawal of PHP, a Lansing-based HMO whose local franchise was owned by Hackley Hospital. PHP stopped accepting new enrollees in August 2001 and folded shop in Muskegon completely last December.
Those pullouts left Priority Health, the Grand Rapids-based health plan majority-owned by Spectrum Health, and Blue Cross Blue Shield of Michigan largely in control of the market.
Amid that backdrop, employers in the Muskegon area were pushing Westshore Health Network to secure agreements with other health plans, Executive Director Linda Bailey said.
“What the employers were saying to us was the market choices were becoming more and more limited,” Bailey said. “This does begin to offer choice again.”
The agreement doubles Aetna’s care network in Muskegon and expands it by 20 percent in West Michigan to 1,336 physicians, including 637 primary-care doctors and 699 specialty physicians, and 17 acute-care hospitals.
Aetna now has about 26,000 members in West Michigan through its PPO, open-access, point-of-service and traditional indemnity health plans. The Hartford, Conn.-based Aetna provides medical benefits to about 13 million people nationwide.
Westshore Health Network is open to bringing other health plans to town to generate further competition in the wake of the Care Choices and PHP departures that created a competition void in the market, Bailey said.
“We want to make sure we support employer choice of health plans,” Bailey said. “Muskegon is probably a very ripe area for health plans that are expanding their market. We have large gaps because of the two HMOs that left the market.”