Is Your Provider-Sponsored Health Plan Powering Growth — or Quietly Draining It?

Alexandra Criscione, Director

Jamie Hanrahan, Principal

Health systems often assume that owning a health plan will automatically drive margin, market control, or population health success. But the truth is more complex. A provider-sponsored health plan can be a powerful strategic lever or a costly distraction, depending on how clearly it’s aligned with health system goals.

Why This Matters Now

Healthcare margins are thin, payers are consolidating, and capital is scarce. Every investment must earn its place. A misaligned or underperforming health plan doesn’t just fail to deliver; it actively limits your ability to fund core priorities.

Leaders who are honest about these questions gain clarity: double down where the plan can win, restructure what isn’t working, or exit before more capital and attention are lost.

The question every leadership team should ask:

Is your provider-sponsored health plan accelerating your strategy, or is it quietly consuming capital, talent, and focus without moving the needle?

Across the country, many systems are reassessing their plans. Some are doubling down and growing, while others narrow offerings to segments where they can truly compete. Some are exiting entirely. The difference isn’t ownership, it’s clarity of purpose, disciplined execution, and a hard look at whether the plan creates measurable value.

If you haven’t pressure-tested your plan recently, these are the critical questions that can’t be ignored:

1. Market Fit: Are You Playing in the Right Segments?

   Diversifying into Medicare Advantage, Medicaid, Commercial ASO, Exchange, or fully insured products seems smart — until the costs of entry and specialization outpace the value.

   ○ Are you competing in segments that support your health system’s long-term strategy?

   ○ Have you enrolled enough fully insured lives to be profitable in the aggregate across the system?

   ○ Is diversification protecting revenue or diluting focus and stretching resources?

   
   

2. Scale: Do You Have Enough Membership to Matter?

   Size determines your economics. Too small, and you can’t spread risk or fund infrastructure. Growing too big, too fast, creates complexity that can crush performance.

   ○ Is your current membership scale sustainable?

   ○ If growth has stalled, should you double down on your strongest segments or pivot?

   
   

3. Operations: Can You Compete on Performance?

   Your balance of internal capabilities and external partners (TPA, PBM, claims platforms, care management) defines whether the plan is nimble and efficient or an administrative burden.

   ○ Is your vendor mix truly competitive?

   ○ Are you managing the total cost of care effectively or leaking value?

   ○ Is your claims platform scalable and operationally modernized?

   
   

4. Financial Impact: Does the Plan Strengthen the System or Just Shuffle Dollars?

   A plan can create negotiating leverage and drive system volume, or it can simply shift dollars internally without adding new value.

   ○ Is your plan a growth engine or a financial drain?

   ○ Does it strengthen your payer negotiations or complicate them?

Where BDC Advisors Can Help

BDC Advisors has guided leading health systems through critical, board-level decisions on market strategy—including provider-sponsored health plans. We support start-up, product and segment strategy, performance improvement (including reducing total cost of care), and divestiture. We bring:

• Deep payer insight: decades negotiating from both the payer and provider side

• Proven analytics: modeling membership scale, margin impact, and payer leverage

• Practical strategy: from restructuring existing plans to sharpening market focus—or recommending sale and/or exit

Contact BDC Advisors

We help you see the full picture—financial, strategic, and operational—and chart the smartest path forward before the plan dictates your future.

Your next board conversation shouldn’t be about guessing. It should be about making a clear, confident choice: grow, refocus, or exit. If you want an unflinching, data-driven assessment of your plan’s true value and future potential, BDC Advisors can help you get there.

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To explore strategies for aligning your provider-sponsored health plan with system goals, optimizing market fit, and driving measurable value, please contact Alexandra Criscione, Director, BDC Advisors, at (773) 485-1891 or alexandra.criscione@bdcadvisors.com.