California OKs Sutter Health HMO for Sonoma County

Nikki Canelis of Cazadero learned two important things during her visit Tuesday morning with a Sutter Health-affiliated breast imaging radiologist in Santa Rosa.

First and foremost, she got a clean bill of health with no new cyst growth since her breast surgery last August.

And while not as dramatic, Canelis also learned Tuesday that she will now have the option of buying Sutter’s own HMO insurance.

“If the insurance is as good as the doctors are, then I’d love to switch - have it all in one system,” said Canelis, 42, who currently is covered by Health Net through her husband’s family business.

“My husband was thinking about switching to Kaiser, but I said no. I love my doctors. I don’t want to change,” she said, adding that she’s been a Sutter patient since her children were born two decades ago.

On Tuesday, Sutter Health announced that state officials had given it the green light to market its own HMO product, Sutter Health Plus, in Sonoma County.

The move allows Sutter to develop locally a more integrated managed care model like that offered by Kaiser Permanente. It could also bring a more affordable health plan option to patients using the local Sutter Health system, according to insurance experts.

“Let’s face it: They’re going after Kaiser market share,” said Vic McKnight, a broker and principal at the Petaluma office of EPIC Insurance Brokers.

“There’s just not a lot of competition in the health insurance market,” McKnight said, adding that Sutter Health Plus could be an alternative for local residents who are shopping for the ?lowest-cost plan.

He said people like Canelis, whose entire roster of physicians is affiliated with Sutter Health, are ideal candidates for the new HMO.

One of the largest health care providers in Sonoma County and California, Sutter Health first launched its own health plan in January 2014. Last fall, Sutter Health filed a “notice of material modification” with the state Department of Managed Health Care to sell the HMO plan in Sonoma County. The health plan was previously available in a multicounty region taking in much of the Central Valley.

Sutter Health Plus CEO Steve Nolte said Sutter officials came to the conclusion three years ago that having an in-house insurance product would allow the nonprofit health care provider to better adapt to the rapidly changing health care landscape under President Barack Obama’s Affordable Care Act.

“We believe that health care is becoming more confusing, and we believe that we have the ability to make it less confusing,” Nolte said, adding that selling its own HMO plan allows Sutter to have a direct line of communication with patients to better manage their health care.

The health care industry, he said, is changing from a “business-to-business” model to one that is more consumer-driven, centered around the health care needs of the patient. It is a model that is increasingly focused on health care outcomes.

Selling its own HMO products “places us directly in the pathway of the voice of the customer. Hearing it, we get an unfiltered view of what they’re thinking … how their health care will be paid for and delivered.”

State approval was given last Friday, and Sutter Health Plus has begun to reach out to insurance brokers, agents, consultants and any other professional authorized to give health insurance advice. Nolte said Sutter will conduct a “modest” branding campaign to promote the new HMO products, but that most of the promotion will take place through insurance brokers, agents and consultants.

Sutter said it doesn’t have any estimates on how many members it expects to enroll in Sonoma County. Sutter Health Plus expects to soon have 9,500?members in Sacramento and another 2,500 members in the Central Valley.

Unlike Kaiser’s closed system of health plans, Sutter has said that its affiliated physicians would continue to accept other health insurance plans such as Blue Shield and Health Net alongside its own.

The news that Sutter will now offer its own health plan in Sonoma County comes less than five months after the health care provider opened a new $292 million hospital and 80,000-square-foot medical office building off Mark West Springs Road north of Santa Rosa. The new hospital, set to host or employ 950 doctors, nurses and other staff, is expected to receive about 50,000 hospital visitors annually.

Sutter Health Plus would consist of a suite of small- and large-group HMO plans and four individual plans that will mirror the platinum, gold, silver and bronze tiers offered in the Covered California health exchange. Sutter Health Plus will not be sold through the state health exchange, though that avenue is currently being evaluated for 2016, Nolte said.

The plans will be offered in the most populated areas of Sonoma County. The plans’ service area does not include Sea Ranch and the northwest corner of Sonoma County.

Several communities close to that region - including Jenner, Guerneville, Duncans Mills, Monte Rio and Cazadero - will be in the Sutter Health Plus service area.

You can reach Staff Writer Martin Espinoza at 521-5213 or martin.espinoza@pressdemocrat.com. On Twitter @renofish.