Reciprocal Care

ADVERTISING
SECTION

RECIPROCAL
CARE

BY DENNIS MONTGOMERY

The way CommunityHealth officials see it, the economics of rural medicine are a problem for small-town and suburban employers who, like their big-city counterparts, might save money by switching from conventional insurance to managed-care plans or self-funding. President Larry Kinzler says his Richmond-based company is the solution.

CommunityHealth is an insurance reciprocal that helps communities form local health-care networks. Much like a mutual company, the reciprocal organizes partnerships of hospitals, doctors and employers that cooperate to provide hometown, high-quality, lower-cost health care. Seventeen Virginia communities are already involved.

“CommunityHealth is a group of interests with common health-insurance needs that collectively insure themselves and use CommunityHealth Care Management Co. to supervise the reciprocal’s insurance products,” Kinzler says.

The reciprocal, he explains, can offer insured and self-insured benefit plans based upon a preferred-provider and/or a health-maintenance organization model serving each participating community. Hospitals make the initial capital subscriptions through subordinated loans. They have preferred voting rights, but employers and doctors also sit on the board, so all the constituencies have an interest in the organization’s success.

To self-insured employers, the network offers third-party administration. By purchasing stop-loss insurance from the reciprocal, these employers also can participate in the reciprocal’s management.

CommunityHealth says the reciprocal structure allows providers and employers to share managed-care savings, eliminate middleman profits and make managed-care decisions locally.