Health IT

Providers & Payers Need to Learn How to Play Nice Sooner Rather Than Later

Even though providers and payers don’t always get along, they need to come together now more than ever. In the post-pandemic landscape, the healthcare industry won’t be able to maintain care quality and protect patient access without strong collaboration between these two parties, health system leaders said during a virtual panel.

Historically, the relationship between providers and payers has been contentious. After all, the nature of this relationship inherently puts both parties at odds — providers want to get paid for all the care they deliver, and payers want to keep their costs down as much as they can.

Recently with providers facing revenue challenges and payers reporting increased profits, that relationship has been strained further.

Despite these dynamics, they need to come together now more than ever, according to two health system leaders. In the post-pandemic landscape, the healthcare industry won’t be able to maintain care quality and protect patient access without strong collaboration between providers and payers, they said Tuesday during a virtual panel hosted by the National Association for Healthcare Quality.

The U.S. healthcare sector is about 30 years deep into an unending inflationary cost trend, in which expenses continue to rise, declared Roy Schwartz, Penn Medicine’s vice president of payer strategy. 

This problem affects stakeholders across the industry, with patients being the most important — these cost pressures are causing smaller providers to close, cutting off people’s access to healthcare. To prevent more patient access issues from arising across the country, providers and payers must come together to “collaboratively reframe and organize [their] systems to be more efficient,” he said.

The way that providers and payers have coalesced around value-based contracts over the past decade may seem like a beacon of hope, but Schwartz pointed out that these partnerships are still quite fledgling.

“I think the work that’s been done in population health and value-based payment models is still very much a 1.0 model where we focus on prospective risk assessment for risk coding and care planning. We focus on closing care gaps and providing more insight, data and information to advanced primary care practices, but it doesn’t go a ton beyond that,” he explained.

Moving into the 2.0 model will require significantly more collaboration. This collaboration is not just between primary care practices and payers — Schwartz said that it must involve “the hospitals, the specialists and the health systems that are actually consuming the vast majority of the healthcare resources and spend that folks are looking to get a handle on.”

Beau Raymond, chief medical officer of Ochsner Health Network, agreed with Schwartz that providers can’t be expected to figure out how to combat exceedingly rising costs on their own. Not only are costs for labor and supplies soaring, but care is increasingly moving to outpatient settings — where providers are reimbursed less. And if providers want to do a good job of paying attention to patients’ social determinant of health, they will face added costs from that as well, Raymond noted.

“Eighty percent of a person’s health is not related to what goes on in the doctor’s office, inside the hospital or the meds prescribed. It’s determined by where you live, your paycheck, your habits, your genetics — all those things are the factors. Now hospitals are being asked more and more to help deal with these social determinants. However, there’s been a couple of studies that have come out to show that the resources that are available to help address those disparities are not close to what’s necessary,” he explained.

It’s clear that social and economic factors play a huge role in health, but providers can’t implement strategies to address those factors without additional support from payers, especially amid significant financial woes, Raymond declared.

“We have to work collaboratively together to try to improve the health of our communities. Because without it, we’re not gonna get there. We’ve been fighting each other in opposition in fee-for-service, but the only way we can move forward is if we’re all on the same page, working the same way and trying to improve people’s health,” he said.

Photo: Dmitrii_Guzhanin, Getty Images