Hospitals, Payers

Report: Which US markets are ripe for ‘payvider’ models? 

“Payvider” models — that is, collaborative arrangements between payers and providers — are growing in popularity. But not all markets are created equal with regard to payvider adoption and growth. In a new report, consultancy firm Guidehouse identifies the markets with the most opportunities for payviders.

Certain markets in the U.S. are ripe for contractual or joint ownership arrangements between payers and providers, according to a new report by Guidehouse, a consultancy firm.

These arrangements — dubbed “payvider models” — take various forms, including provider-sponsored health plans; national payers directly employing physicians; joint ventures; and long-term risk-based contracting between providers and payers.

Guidehouse performed a market disruption analysis to evaluate opportunities for payvider models across the country. It assessed more than 100 markets — with a population of 500,000 or more — based on market size and future growth of members under value-based arrangements relative to current healthcare utilization, cost and quality performance.

According to the report, the following markets have the greatest opportunities for payvider adoption and growth:

  • New York-Newark-Jersey City (New York/New Jersey/Pennsylvania metro area)
  • Miami-Fort Lauderdale-West Palm Beach (Florida metro area)
  • Phoenix-Mesa-Scottsdale (Arizona metro area)
  • Detroit-Warren-Dearborn (Michigan metro area)
  • Tampa-St. Petersburg-Clearwater (Florida metro area)

The report also identified the markets with the highest performing payviders:

  • Los Angeles-Long Beach-Anaheim (California metro area)
  • San Francisco-Oakland-Hayward (California metro area)
  • Riverside-San Bernardino-Ontario (California metro area)
  • Minneapolis-St. Paul-Bloomington (Minnesota/Wisconsin metro area)
  • San Diego-Carlsbad (California metro area)

On the other hand, some of the markets with the fewest opportunities for payvider adoption and the lowest-performing payviders are Seattle-Tacoma-Bellevue (Washington metro area); Denver-Aurora-Lakewood (Colorado metro area); and Chicago-Naperville-Elgin (Illinois/Indiana/Wisconsin metro area).

“The rules of the game for delivering high-quality, cost-effective, consumer-centric care are changing, and healthcare organizations are at an inflection point,” said Michael Nugent, partner at Guidehouse, in a news release. “Where an organization is positioned in their market greatly influences their business model. This has created a demand and urgency for payviders, where payers and providers must work in harmonious accountability to succeed.”

In addition to identifying market opportunities, Guidehouse also outlined the factors driving payvider models. These include potential actions by the Centers for Medicare and Medicaid Services, like narrowing value-based payment models to those that save Medicare money and are scalable, as well as the fact that commercial payers will likely continue to follow CMS’ lead for alternate payment models.

“Overall, providers and payers have two choices: maintain the status quo or develop and grow payvider models to strengthen the ability to compete and improve margin,” the report’s authors wrote.

Photo: mediaphotos, Getty Images