Although industry progress in the transformation journey from volume-based reimbursement (fee-for-service) to value or outcomes-based reimbursement (value-based care) has been mixed, industry leaders believe this strategy holds promise for a better system that lowers costs while improving health outcomes and patient satisfaction.
Many payers have established deeper relationships with primary care organizations as a way to accelerate progress. Relationship models include ownership, joint-ventures and strategic contracts.
Payers pursuing provider alliance strategies have generally reached certain conclusions.
- Value-based care contracts that change the financial incentives for providers are often not sufficient to drive meaningful change at the provider level, particularly for providers who maintain a significant fee-for-service patient volume.
- Many providers don’t have the capital, experience or capabilities to transform their practices to be able to deliver optimal outcomes on their own.
- Having exclusive relationships or deep patient volume share with the provider organization is essential to providing member access to care and to establishing the provider “mind-share” level required to implement change and sustain high-levels of performance.
Establishing provider alliances is only the first step for payers to accelerate value-based care progress.
- Payers must navigate patients to the provider which can be achieved through product design, network design and member communications initiatives.
- Payers should help the provider modify the providers clinical and service model. This effort could include process redesign, training and establishment of supporting compensation programs.
- Finally, the payer should work to integrate data and processes to better link payer and provider initiatives. Integrating data, analytics, network management, care management and communications processes can substantially improve results and deepen the relationship between the provider and the payer.
Establishing effective and differentiated payer-provider alliances can be a major strategic advantage for payers and beneficial for forward-looking providers. This strategy is quite different than other provider network strategies and can be somewhat disruptive in the local marketplace. At the same time, disruption is probably a prerequisite for transformation.