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Why health-insurer upstarts like Alignment, Bright, and Clover are following UnitedHealth’s blueprint and employing doctors and nurses

  • Insurer upstarts like Alignment, Bright, and Clover have waded into the business of providing care.
  • They’re betting they can save costs by controlling which specialists or hospitals members go to.
  • They also want to give members more ways to get care without competing with community doctors.
  • See more stories on Insider’s business page.

Alignment Healthcare is caring for its sickest 4,000 members with doctors and nurses it employs. Clover Health is sending care teams into thousands of patients’ homes. And Bright Health is buying up and operating primary-care clinics.

These young health insurers, all of which went public this year, are making it a key part of their business strategies to do more than pay medical bills — they want to provide the care, too.

They’re following in the footsteps of health-insurance industry giants like UnitedHealth Group and Humana that have long blurred the lines between health plans and providers as they attempt to tame rising healthcare costs.

Like the incumbents, the upstart insurers are betting that by having their members see primary-care doctors that they employ, they can better control how much they spend on care and where their members get it. They also want to give patients more ways to get care by treating them virtually and at home.

Insurers’ push into providing care comes as healthcare costs continue to rise, driving people’s insurance premiums higher, and as hospitals rapidly scoop up doctor practices. The upstarts, which arm their doctors with sophisticated technology and data, are hoping that owning primary care will help them compete and grow in a crowded industry.

Insurer upstarts bet they can lower costs by employing doctors

Three medical workers in blue scrubs and one person in a blue shirt and jeans cross an intersection.

Medical workers and pedestrians cross an intersection outside the Houston Methodist Hospital in Texas on June 9.

Getty Images/Brandon Bell


About half of all doctors are employed by hospitals or health systems, a figure that increased as the COVID-19 pandemic strained the finances of independent medical practices. Numerous studies suggest that healthcare costs inflate when hospitals employ doctors because those doctors tend to refer patients to expensive hospital services.

The insurers have the opposite goal.

“Providers have been at the front end of care to feed the beast of the hospital,” said Thomas Robinson, a partner at the consultancy Oliver Wyman. Payers are “trying to starve that very same beast and keep costs down,” he said.

Health insurers that build their networks around high-quality primary-care providers, including those they own, can charge 10% to 20% less for their health plans, said Rachel Zeldin, another Oliver Wyman partner.

Mike Mikan, the CEO of Bright Health, which owns or manages 78 clinics serving 160,000 patients, said that “in some instances where we operate medical centers and employ doctors and nurses and they use all of our tools and capabilities, that’s when we really get optimal performance.”

The upstarts also want to beef up access to virtual and in-home healthcare

John Kao, the CEO of Alignment, wearing a black suit and purple tie, sitting in a beige chair in front of a window in an office.

Alignment Healthcare CEO John Kao.

Courtesy Alignment Healthcare


For some insurers, owning primary care is also about giving their members more options for where to see a doctor. Alignment, Clover, and the insurer Devoted Health have all focused on delivering care virtually or in people’s homes.

Alignment employs 150 clinicians who care for its sickest plan members virtually and in their homes.

Clover expects its in-house healthcare providers to serve 3,000 to 3,500 Medicare Advantage members in its home-care program by the end of this year, Dr. Kumar Dharmarajan, the head of Clover Home Care, told Insider.

People buy health coverage because they think it’ll help them get healthcare, but provider directories are often riddled with errors, and doctors tend to have long wait times. Health plans bear the brunt of their members’ frustration, so some have moved to add services where they’re lacking, said Bob Kocher, a partner at the venture-capital firm Venrock who’s on the board of Devoted Health.

“They’re pretty careful to add services in areas where their networks are scarce or where they don’t have lots of supply,” Kocher said. “That’s why you’re seeing them do primary care. They’re not competing with the specialists.”

Still, the newer insurers are reluctant to compete with community doctors. Maintaining those relationships is important to having high-quality provider networks.

“What we won’t do is compete with our provider partners,” Alignment CEO John Kao said.

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