More providers have been getting into the private insurance market in recent years, apparently seeing an opportunity in the creation of the insurance exchanges set up by the Patient Protection and Affordable Care Act.  

"In addition to Medicare Advantage, providers are becoming payers to compete on exchanges and serve employers," said Elizabeth Carpenter, vice president at Avalere. "When combined with new start-ups and other options created by the Affordable Care Act, the insurance market looks increasingly diverse."

Another recent report cast doubt on claims that the Medicare Advantage insurance market is truly diverse, particularly in rural parts of the country, where much of the market is dominated by several insurance giants. 

Attempts by providers to enter the insurance business have shown mixed results. Some health systems have reported major losses from their insurance ventures. Boston-based Partners HealthCare System lost $110 million in 2014 and an insurance plan backed by Fairview Health System in Minneapolis had to pull out of the Minnesota state insurance exchange because of losses, despite being the most popular plan on the exchange. 

A recent poll underscored the challenges that providers face in marketing their insurance plans. Most consumers are still largely unaware of provider-backed insurance and don't have strong opinions about whether such a system would deliver better service. 

Another challenge that providers worry that those who they are most likely to attract are the ones who they come into contact with most frequently –– the sickest and costliest patients. Nevertheless, a recent report by Moody's on provider-backed insurance found that most health systems that started plans benefitted from them.