“We need to significantly deal with quality issues and affordability issues that both New Jersey and the country face,” said Richard Popiel, who served as vice president and chief medical officer at Newark-based Horizon and will serve as the new company’s president and chief operating officer. “That is not being addressed in the way it needs to be addressed in the current health care legislation.”

Horizon decided to create a new company, Horizon Healthcare Innovations, because “the level of effort and the need to focus without distraction to be successful is so significant, it will take effort of a separate company with a singular focus,” he said.

The new company is expected to begin operations in September, but as a Horizon division, already is working on building partnerships with industry players to develop pilot programs to improve the quality of care, increase efficiencies and keep costs in check, according to Horizon Blue Cross.

Popiel said the new company will roll out two to four pilot programs this year, primarily involving medical homes — or models that promote a team-based approach in the care of a patient, whether over the course of the patient’s life or during the treatment of a disease — and by 2011, ramp up to 30 pilot programs.

These pilots “won’t be perfect, but in a collaborative mode with the provider community, we’ll take what’s best out of what we’ve learned and reinvest it,” he said.

By 2012, “we’re expecting a substantial number of our membership to be under these pilots, and by 2015, we’re anticipating roughly 80 percent to be under these models of care,” Popiel said.

Horizon also will be working with third-party academic research institutions on the pilot programs, so that “with each step, these models are being evaluated, reviewed and validated in terms of the impact that they have.”

The new company “is a very big deal,” said David Knowlton, president and CEO of the New Jersey Health Care Quality Institute, in Trenton. The industry “is reinventing itself because of health care reform. What’s going to change is how cost is allocated, and what will survive and what will die” in terms of current health care policy.

As a result of health care reform, which will get nearly everyone in the country covered by insurance, “the health care insurance environment is going to be a lot more competitive,” he said. “Insurers have got to compete so they can contain costs.”

Horizon’s new company “will be looking at different payment models to experiment with how they can make it work more efficiently,” Knowlton said, noting the company is the first insurer to be experimenting with different care models.

He expected other insurers to soon follow.

“This is really a national phenomenon,” he said. “Nationally, people are going to be watching what Horizon is doing on this.”

E-mail Evelyn Lee at elee@njbiz.com