Healthcare’s quest for greater payer-provider synergy

The healthcare industry’s aim to raise the bar on performance and improve outcomes and cost efficiency through population health management is changing how business is done-for both payers and providers. The history of conflict must end in post-reform healthcare, as new risk-based business models compel payers and providers to seek opportunities for synergy.

As providers accept increasing accountability for delivering value, the language of provider contracting must change from “reimbursement” to “compensation." Healthcare reform reinforces the priority for quality performance as an increasing component of total compensation for providers.  Meanwhile, providers are at different stages of “accountable care” readiness and many are moving cautiously toward the new care management models aligned with post-reform financial incentives.

Payers are in the strongest-position to activate the transition to value-based management models, but they must improve collaboration with providers.

New models of collaboration

Coordinated, high quality care demands provider-payer collaboration to actuate high-performing provider networks, where expertise, knowledge and data are shared to execute population health management strategies and performance-based financial arrangements.

In fact, one of our clients, Joel Vengco, vice president and chief information officer at Baystate Health (which owns its own  health plan, Health New England), put it best saying: “The collaboration between payer and provider is necessary to impact efficient and cost-effective care delivery. High-value care can only be achieved when collaboration between clinical and payer sides is attained.”

Payers are in a solid position to advance the quality and safety of care by informing providers about the population risk of their patient panels. Most physicians maintain their own medical records for patients, yet few practices have timely access to the services provided by other providers. Payers have a lot of the missing data and extensive experience with risk and population analytics.

Data maintained by payers comprise a useful proxy for a comprehensive, current view of patient history. Payers should share this comprehensive view and risk profile with caregivers to catalyze transition to value-base care and accelerate population health management initiatives. At Baystate Health, for example, providers in the accountable care organization (ACO) and Baystate Health’s payer, Health New England, are collaborating around care management, which has helped the organization better manage risk from a clinical perspective, resulting in decreased costs and improved patient health.

While payers understand population health, they are not positioned to impact the clinical risk of individual patients. Mitigating clinical risk has become imperative under post-reform financial incentives, and payers can’t do it without partnering with providers. Physicians enjoy the primary trusted relationship with their patient that is so essential to sustained patient engagement and better adherence to a plan of care.

We won’t achieve Triple Aim goals unless patients take an active role in their own self-care. Strategies to achieve this include payers being more transparent about the patient data they control and better leveraging provider partnerships to engage patients. This enables them to work with providers to deliver on the intent and objectives of the past decade of reform legislation to improve population health and the increase the value of services delivered.

This type of collaboration is enabling organizations like Baystate Health to be more nimble with payment structures. With collaboration, the health system is able to better understand and experiment with specific incentives and reimbursement models to find the model that works best for all parties and fosters proactive, cost-effective care delivery.

Next: Technology matters

By looking beyond data transparency and simplifying administrative processes, provider-payer partnerships can also benefit from shared investments to improve collaboration, automate workflow, and enhance information exchange. Population health management requires access to current, comprehensive patient data and an adaptable infrastructure for care coordination.  

Effective population health management hinges on bringing together a variety of advanced technologies, insightful data and enhanced business processes. Payers and providers should look to use technologies capable of gleaning information from disparate systems and presenting it in a meaningful way to clinical teams. From there, they can better assess risk and cater to consumers in a more personal way, helping patients positively change their health behaviors, adhere to their care plans and be more engaged.

Transactional documentation and data processing systems generate potentially useful data, but aren’t designed to produce and apply risk analytics or support clinical team work, population health management and the workflow of new “cross-border” organizational models. By leveraging analytics to support these goals, providers and payers can collaborate through liberated data to support their population health management goals. While hospital consolidation of physician groups continues across the country, independent providers and hospitals still comprise the core of most health system networks; meanwhile, the actual work of care orchestration must center on the patient.

Looking forward

By far the most potent catalyst for provider-payer partnerships are state and federal financial pressures to decrease the cost of government-sponsored health programs. Aging and the increasingly urban US population will increase the cost of these programs, and government can’t afford the fee-for-service payment model. As a result, the privatized government programs-Medicare Advantage, Managed Medicaid and Duals-are a growing market segment. The performance incentives of these private health plans cannot be achieved without partnership and payer-provider cooperation with a shared focus on the Triple Aim.

Traditional fee for service medicine isn’t going away, either. Some health systems will leverage the strategy to maintain the lowest cost structure for as long as possible.  

In most population centers, the regional business dynamics for both payers and providers will commoditize transactional revenue models, as margins are compressed and the pool of preferred and willing providers shrink.

Payer-provider collaboration is a disruptive and discontinuous learning process. Tolerance for failed experiments is going to be a key element of any trusted relationship.

The healthcare consumer will be the biggest winner, as the industry transitions from uncoordinated treatment of sickness, to new adaptive organization models focused on value by improving population health management, preventing adverse events, managing total cost and delivering a high quality consumer experience.

Larry Schor is the senior vice president at Medecision. He holds nearly 30 years of experience in the healthcare and technology sectors and helps payer and providers build strategies to turn silos into powerful systems so that they have the data and the insight they need, when and where they need it, to treat the whole patient.