Avera Providers Drop Sanford Health Plan

Sep 30, 2016

Avera Health is removing its South Dakota hospitals, clinics, and physicians from the Sanford Health Plan. The change means people who have Sanford insurance won’t have coverage if they go to Avera’s providers. It’s the latest development in a health care clash among the state’s two largest health systems.

Avera leaders estimate their decision to stop participating with Sanford Health plans affects between 1,000 and 1,500 families. They’re the latest people affected by a back-and-forth between Sanford and Avera, organizations that each include both health care providers and insurance companies. Rob Bates is executive vice president of insurance services at Avera.

He responds to this concern: because people who have Avera and DakotaCare plans are no longer able to get coverage at Sanford and now people who have Sanford Health coverage are no longer able to get coverage at Avera, it seems like a tit-for-tat.

BATES: Well, there’s no question that Sanford’s decisions were a catalyst for our decision, but it goes well beyond that. Actually we’ve discussed this decision to pull our providers from Sanford’s health plan. We’ve discussed this multiple times over the years, and we didn’t think now that it made any sense to consider that. But it kind of comes back to the other systems in town now are narrow. Avera wants to focus on their providers to do these innovative care models, just as Sanford has done really with their decisions, so this really aligns us, I think, as a system to do more innovative things with our employed positions that can impact the care and the quality and the cost of care that we deliver to our patients, So the time was right, and there’s no doubt that the decision that Sanford made sort of accelerated and got us talking about making this decision.

Bates says nationally insurance products that are successful have limited networks of providers.

"This is not a South Dakota phenomenon. This is a national trend, and even Wellmark recently acknowledged that when they stepped away from the individual market on the exchange. They acknowledged the fact that ‘we just can’t compete with these narrower value-based networks,'" Bates says.

That means plans allow fewer choices within their insurance coverage. Avera’s chief medical officer Doctor Tad Jacobs says people still have health care choices.

"The decision that they have to make is, ‘Am I willing to pay a little higher premium to see my doctor that I’m continuing to see now, or pay a lesser premium and see somebody else?’ And that ultimately is an individual decision, and those are hard things," Jacobs says.

Jacobs says he knows the decision directly affects people who have Sanford insurance but utilize Avera’s physicians and facilities.

"I guess the important thing is, what does this mean to the patients? This ultimately will have an effect on our patients," Jacobs says. "We realize that Avera leaving the Sanford Health Plan network presents hardships for people ensured by Sanford Health plans and being cared for by Avera providers, and for that we are truly sorry."

Avera Chief Medical Officer Tad Jacobs listens at Executive VP of Insurance Rob Bates speaks Friday about the health plan change.
Credit Kealey Bultena / SDPB

He says the decision aims to ensure viability for Avera’s services and that the move is within Avera’s values.

“Part of that mission is being good stewards – good stewards for the dollars that patient[s] entrust in us through premiums, to make sure that we’re able to provide them value at the lowest cost,” Jacobs says. “So when we talk about focusing within our insurance offerings throughout our health plans, it goes beyond just saying ‘Well, we’re going to make those premiums cheaper.’ It’s ways to engage patients in a deeper way to help avoid significant illnesses in the future that will drive their costs higher."

Avera leaders say the termination does not apply to behavioral health care and certain situations in which people are dealing with chronic conditions.

Changes at Sanford and Avera to stop accepting the other systems' insurance happen on January 1, 2017.

To hear how this affects people who have insurance from either company, visit this link to a Dakota Midday discussion. If you are a patient affected by these switches, contact us via email or social media.