Bon Secours Richmond Health System has entered the health insurance game.

The system recently launched its Bon Secours Value Network, a self-insured program for small- and medium-sized businesses in central Virginia.

Self-funded plans are usually reserved for massive companies with hundreds of employees. Value Network makes such plans available to smaller companies with 10 to 100 employees.

Traditionally, small companies are limited in their insurance options to fully funded plans, which require them to pay a monthly premium whether or not employees actually use health care services.

Through a self-insured plan, a company pays for the cost of care directly and only when it is needed.

“In a self-insured plan, you can control those costs,” said Tony Herbert, Bon Secours’ vice president of managed care. “If your employees don’t get sick and you incentivize them to take more interest in their health, then you can keep the costs under control.”

Because Value Network is a self-insured plan, Bon Secours is not taking on the responsibilities of a traditional insurance company. Rather, companies pay for the costs of care and contract directly with Bon Secours — which offers resources to those companies such as its workforce wellness program and access to care providers at its 100 Richmond-area locations, including five hospitals.

“The other thing we’ve done with a provider network is provide access to a competitive rate,” Herbert said. “An employer couldn’t negotiate rates with a large provider base; they don’t have the infrastructure, the information or time to spend on health care when they’re really focusing on managing their own business.”

The health system began discussing the Value Network about 12 months ago, then made it available at the beginning of this year. It has partnered with locally based Accountable Care Management Group LLC, which will work as the third-party administrator for the program, and with SIMA Benefits Consulting Group LLC, for sales and marketing services.

The system has also partnered with other health care providers, including Virginia Physicians Inc., an independent physician group, and Tuckahoe Orthopaedics in western Henrico County, to expand care options for participating companies.

“And we will, in the next two to three months, be expanding our network participation,” Herbert said.

Right now, Value Network is just in the roll-out phase, Herbert said. It is working to fine-tune its operations and logistics, to make sure all its physicians offices are equipped for the program.

Herbert did not say how much it cost Bon Secours to roll out the program, but described it as a significant commitment.

A handful of clients have joined Value Network already, including Veritas School, a private school in Richmond’s North Side. Right now, it is only available in central Virginia, but Herbert said the health system plans to expand it to Hampton Roads by the end of the year.

Value Network offers employers more control over their plans and the opportunity to lower costs by implementing wellness programs that previously were available only to large companies. Herbert also pointed out that fully funded plans can be a burden for some smaller companies with only a handful of employees.

“I think one of the things that is becoming apparent in the health care world is that the status quo isn’t going to work for anybody,” he said. “Not just consumers, but for the taxpayers, the providers, and for the insurance world. The model that’s in the system today isn’t an appropriate model, and it’s certainly not sustainable”

“We were looking at trying to find alternative solutions that might be applicable to different parts of the market. There’s no one-size-fits-all solution.”

Bon Secours is a nonprofit health system employing more than 8,400 people, including nearly 420 providers, in Virginia. It operates St. Mary’s Hospital, Memorial Regional Medical Center, Richmond Community Hospital, Rappahannock General Hospital and St. Francis Medical Center.

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