ThedaCare announced last week that it will leave Network Health on December 31, 2016. The Appleton-based health system first informed the Menasha-based health insurer last month that it would not continue the five year partnership that was due to expire at the end of July. The new extension will give Network Health employer groups and members extra time to adapt to the change, but will still result in significant disruption in the Northeast Wisconsin health insurance market.
ThedaCare is the largest employer in Northeast Wisconsin and consists of Appleton Medical Center, Neenah’s Theda Clark Medical Center, and dozens of other facilities in the greater Fox Valley area. Network Health is a provider-sponsored health plan co-owned by Froedtert Health and Ministry Health Care. Based in Menasha, Network Health has its roots in Northeast Wisconsin but last year expanded into the southeast part of the state.
According to Network Health President and CEO Sheila Jenkins, only 13% of Network Health members visited a ThedaCare provider in the last year, and only about 5% of Network members see a ThedaCare doctor as their primary care physician. However, employers and members in the Fox Valley will impacted more dramatically because of ThedaCare’s large presence in the area. For example, Appleton Area School District CFO Don Hietpas estimated that 60% of the District’s employee’s use ThedaCare physicians.
Groups like the AASD that offer Network Health insurance to employees who use ThedaCare providers are in a difficult position. As ThedaCare President and CEO Dean Gruner told WBAY earlier this month, “[t]hey will choose to stay with Network Health and choose other providers or they will wind up switching insurance companies.”
The reason behind the split was not publicly announced. ThedaCare spokesman Bill Mann told the Appleton Post Crescent that the breakup was a business decision, not a negotiation ploy. Jenkins also told the paper in December that Network gave ThedaCare a “pretty sizable rate increase” in their most recent contract, but did not explain why the two sides could not come to terms.
The decision may be related to the ongoing convergence of health systems according to their affiliations with the state’s two largest Accountable Care Organizations, AboutHealth and Integrated Health Network (IHN). ThedaCare is a member of AboutHealth. Both of Network Health’s co-owners, Froedtert Health and Ministry Health Care are members of IHN. In addition, one of ThedaCare’s main competitors is Affinity Medical Group, which is owned by Ministry Health Care.
The Network-ThedaCare schism is not the first insurer-provider contracting decision to disrupt individuals’ relationships with their health care and insurance providers, and it certainly will not be the last. Aetna and Columbia St. Mary’s are currently attempting to renegotiate a contract that was originally set to expire on July 1, 2015, but that has been extended four times since then. The most recent was released on December 22 and announced that the termination date of January 1 was being delayed to March 1. Unless of course the parties agree to a new contract or another extension, in which case members will be sent a retraction letter to announce the news of a new agreement.