The Twin Cities healthcare marketplace: All look alike, results differ

The Twin Cities Healthcare landscape can be summarized as highly consolidated, ostensibly integrated and, at some level, all systems of care look pretty much alike.

Five large care systems of varying size dominate the market. There are four non-governmental payers of varying size with three owning most of the commercial health insurance market. One provider system has an integrated health plan with an excess of one million enrollees.

All health systems employ physicians across the spectrum of clinical specialties. All boast high quality and given the nature of the marketplace, pricing (or at least reimbursements) is comparable across health systems. Physicians who are not employed by a integrated health system are, for the most part members of large, single-specialty group practices with most dedicating a high-proportion of available clinical capacity to one (or perhaps two) health systems.

Every large commercial payer (health plan) is important to all the health systems. No health system has committed to one payer. Even the health system that owns and controls an HMO has a provider system that “plays” in all health plans. To the average person “on the street” health care in the Twin Cities is a commodity; i.e. all are “high quality” and actual out-of-pocket financial exposures are pretty much the same across provider systems. An interesting strategic challenge is how a health system differentiate itself under such market conditions?

Daniel Zismer, Ph.D.2013