CDPHP allies self with Buffalo insurer

CDPHP has gone the way of many other health care organizations these days by announcing a strategic

CDPHP has gone the way of many other health care organizations these days by announcing a strategic alliance with a similar not-for-profit health insurer.

CDPHP, based in Albany, and Independent Health, based in Buffalo, announced Tuesday they have formed a strategic alliance to explore opportunities that would benefit customers and providers in each of their geographic markets. For CDPHP, that’s 24 counties across New York state including the greater Capital Region. For Independent Health, that’s the eight westernmost counties of the state.

Both insurers emphasized that the alliance is not a merger and that they will remain independent. But an alliance will allow them to share best practices and expertise, partner with physicians, invest in new technology and develop new products together that focus on achieving the so-called Triple Aim in health care: better health, better care and lower costs.

“By combining the talents, resources and expertise in both of these companies, the alliance will allow us to build innovative products, tools and services for providers, employers and individuals from Albany to Buffalo,” CDPHP President and CEO Dr. John Bennett said in a news release. “Yet, we will be able to continue to provide the same personalized and high-quality customer service that our customers in the Capital District and Western New York have come to recognize and value from these two companies.”

The alliance isn’t too surprising, given the similarities the insurers share. They are both nonprofits that formed in the 1980s — Independent Health in 1980 and CDPHP in 1984. They have similar-sized member enrollments — Independent Health boasts nearly 375,000 members while CDPHP clocked in at the end of 2013 with 447,519 members. They are both Alliance of Community Health Plans members, and have maintained a close relationship for nearly 30 years.

It’s also the latest in a string of announcements from local health organizations announcing similar alliances in recent years — a signal of the changing health care landscape under President Obama’s signature Affordable Care Act. Just last week, Glens Falls and Saratoga hospitals announced they would begin exploring opportunities for collaboration.

As part of the strategic alliance, CDPHP and Independent Health will look to develop tools that help health care providers deliver coordinated care in the most efficient way. They will partner with physicians through technology and clinical innovation to provide patients the right care in the right place at the right time — a strategy designed to reduce cost to the overall system. They will also invest in new technology to provide consumers easier access to the information and services they need, and develop new products with the consumer at the center.

It’s unclear how the alliance might help CDPHP’s bottom line. The local insurer sustained a net loss of $43.9 million last year, which Bennett attributed to the high costs of implementing the Affordable Care Act, increased use of medical services, smaller Medicaid reimbursements and costly regulatory requirements.

A number of Capital Region health care organizations declared their support Tuesday for the alliance, including CapitalCare, Community Care Physicians, the Albany Colonie Regional Chamber of Commerce and Albany Medical Center.

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