As the health care debate rages on in Washington, D.C., a local self-insurance provider is seizing what it sees as an opportunity to grow its business and introduce more efficiency into the health care system.
MagnaCare on Tuesday launched MagnaCare Advisors, a new venture that will market a range of products, including life insurance, long-term disability coverage, and medical malpractice insurance to the company's network of doctors and clients.
The new venture comes amid a national discussion about the need to reduce the cost of health care. Some cite rising medical malpractice premiums as a chief factor driving up costs, but the Patient Protection and Affordable Care Act — President Barack Obama's signature health care reform legislation — didn't address the matter.
MagnaCare President and CEO Joseph Berardo Jr. said he expects health care costs to continue to rise, giving companies like his an opportunity if they can introduce new efficiencies into the system.
"In many ways, nothing in the Affordable Care Act is affordable," he said. "There's nothing in that act that's going to put downward pressure on commercial insurers' costs because there's no downward pressure on the cost of delivering care."
Berardo said the idea for the new venture grew out of a partnership with Physicians' Reciprocal Insurers to provide medical malpractice coverage to doctors in New York.
"We made that available and that was successful," he said. "Then it struck us that providers in many ways could benefit from this kind of group purchasing."
The new venture brings MagnaCare's malpractice coverage, and other products, into the New Jersey market. The company will use its existing network of brokers to sell the products.
Berardo said he also sees the new offerings as a way to add value for its members. Doctors within MagnaCare's network, as well as other clients and members, will receive exclusive discounts for the new services.