Value-Based Care News

3 Key Strategies for a Successful Payer-Provider Relationship

Another critical strategy that will keep the payer-provider relationship strong when negotiating value-based care contracts includes keeping the incentives of both parties in order.

By Vera Gruessner

What are the key ingredients that health insurance companies need to integrate in order to have a successful payer-provider relationship? There are a number of steps that payers and providers will need to follow in order to improve their working relationship.

Value-Based Care Reimbursement

Transparency and data exchange

First, payers operating in new value-based care models will need to ensure greater transparency with their provider network. Everything must be laid out on the table. The reimbursement costs and reasons for claim denials must be very clear from early on.

In fact, price transparency among providers, payers, and consumers could reduce as much as $27 billion of healthcare spending if consumers could shop around for their medical care, one study found.

Another pertinent part of ensuring greater transparency is the need to share data between the payer and all the providers within the network. This is the only way to properly manage the health of its consumer base, as primary care doctors would benefit from having data showing whether their patients were seen at an emergency room or were admitted to a hospital.

This type of medical data exchange is critical for the payer-provider relationship to succeed in a value-based care reimbursement model. Whether insurers and providers are operating through accountable care organizations or bundled payment structures, having access to patient data is key for meeting quality benchmarks.

Aligning incentives in value-based care

Another critical strategy that will keep the payer-provider relationship strong when negotiating value-based care contracts includes keeping the incentives of both parties in order. In an interview, David Thompson, Chief Operating Officer at GlobalHealth, discussed the importance of aligning incentives in a value-based care program.

When asked about any tips payers need to know when negotiating value-based care contracts, Thompson replied, “I think the key is defining the objective, but defining it with that partner. If you’re going to enter into an agreement and develop a program - if it is going to be successful - you have to get the incentives aligned properly. That’s the most important thing.”

“Understanding exactly what motivates the provider and exactly what motivates the health plan and coming up with metrics and measurement of the success of those programs [is vital],” Thompson continued.

Additionally, flexibility within a value-based care contract is important in order to maintain a successful payer-provider relationship, Thompson explained.

“Being willing to be flexible is also important,” he added. “As you dig deeper and deeper into population health management, what you found a year ago will likely be addressed if you’re managing it well. There will be other opportunities that present themselves. So you’ll want to keep that contract and those terms, measurements, and engagement healthy so that you are constantly moving the needle on improving the value of those contracts.”

Adhering to quality metrics and adopting analytics tools

GlobalHealth is an Oklahoma-based health maintenance organization (HMO) that initially began with a network of primary care services and has expanded over the years while remaining provider-centric, Thompson said.

“We’ve expanded our network beyond primary care services,” Thompson continued. “Over the years, we’ve continued to improve our relationship with our providers. In the last three years, we’ve focused quite a bit on our providers and integrating with our various health system partners, ancillary providers, primary care, specialty, and behavioral health providers to manage the population together.”

“What we’ve done is we’ve developed internally predicted modeling tools, care management applications, and built a care coordination team. We integrate that team and all of those tools with our provider network,” he said.

In order for the payer-provider relationship to flourish within a value-based care model, health payers will need to incentivize their provider network to adopt analytics tools and adhere to quality metrics. Often, having reimbursement tied to quality care benchmarks helps incentivize providers to improve any gaps in care.

“About four years ago, we had for many years been very good at managing care at the point of service,” Thompson explained. “We would reach out to members if they had been admitted to the hospital or the ER. As an HMO, we had a referral process so we helped members navigate their benefits. One of our techniques in managing the population was called care rounds where we looked at different cases each week.”

Thompson went on to discuss how one case of a patient being admitted to the hospital led them to research further into the patient’s issue and determine that analytics tools and data exchange could have helped this case.

“One of the cases we looked at four years ago was a member that had been admitted to the hospital that week for a diabetic coma,” he continued. “We asked, ‘is there something we could have done differently to change this outcome?’ If a year ago, we knew that this patient had issues with compliance or overall management of their disease, could we have better intervened?”

“One of our executive directors at the time thought about it and said, ‘probably!’ In a lot of ways, this was one of the cases that ultimately spawned our program,” Thompson pointed out. “We engaged with a predictive modeling partner called Vitreous Health and we sought out to not only be great at what we’re already good at, which is managing care at the point of care, but become great at preventing avoidable admissions, unnecessary medical services, and improving population health outcomes.”

In fact, GlobalHealth’s strategy to implement data analytics tools and follow quality metrics among their provider network was able to keep this HMO from increasing premium costs among their members in recent years. While other payers have had a rise in premiums since the Affordable Care Act took effect, GlobalHealth has kept their costs down, saved on spending, and passed those savings forward to their consumers.

“When we work with our provider partners and share in the savings that we’re realizing, that continues the cycle of managing the population better in future years,” Thompson concluded. “All of those savings that we realize, we pay those forward, keeping premiums low, and improving benefits."

 

Dig Deeper:

How Payers Should Prepare for Value-Based Reimbursement

Why Payers Should Adhere to Patient Engagement, Consumer Choice