Drop the poker face and play nice with providers
Relationships between payers and hospitals (or any provider for that matter) shouldn't be akin to a high-stakes poker match where all players wear dark sunglasses, hide their intentions and attempt to lure their opponents into betting a bad hand.
"Hospitals already feel that the deck is really stacked against them and the payers hold so many cards," said Brandon Edwards, president and CEO of ReviveHealth, which recently released a survey showing hospital executives ranked WellPoint as the most difficult insurer to work with. "When they feel further taken advantage of, that plan's reputation really suffers," he told FierceHealthPayer.
Some payers like playing the villain, believing a poor reputation among providers means they're "doing something right" like charging high rates. As Edwards explained, acting as the proverbial baddie "isn't an accident. The plans get the reputation and ratings that they deliberately strive to earn."
But success in the post-reform healthcare market hinges upon relationships and coordination with other industry players. "In the old days, a high level of conflict between hospitals and health plans might actually be a badge of honor for a health plan," Edwards said. Going forward, however, a much higher level of cooperation is needed for everything from risk sharing to gain sharing to population health management, he added.
"It's really difficult for a health plan to effectively do that if hospitals hate them and don't trust them," Edwards said. That's because hospitals eventually will stop contracting with the difficult payers, leading to inadequate provider networks. "If you have really lousy relationships with your provider organizations, you're going to have a lot more disruption in your network with contracts ending and doctors choosing not to participate," he said.
Essentially, quality relationships matter "for partnering reasons and network stability reasons," Edwards noted. What's more, "there's some correlation between how a health plan deals with its network and how stable its commercial membership is over a period of time."
The ReviveHealth survey has bared that out--payers that have performed well have generally shown good commercial market share growth that same year, Edwards explained.
But he emphasized that payer-provider relationships aren't only about the rates insurers pay to healthcare organizations. It's about establishing open communication, clear standards and trust. "Hospitals really rate plans well that have accuracy and speed. They have clear contracts and clear relationships and clear expectations," Edwards said. If a claim ether is paid erroneously or not paid at all, hospitals and payers can repair the issue very quickly. "It's not necessarily that the rates are high, but that the quality of the relationship is such that problems that arise are solved and communicated very clearly. And there's a level of trust between them."
For example, hospitals consider independent Blues plans to have some of the worst rates among payers, yet they still highly rank these insurers in several categories. "It's like dealing with Medicare--the rates may stink, but the hospitals know what they're going to get and it's always clear," Edwards said.
As for WellPoint, spokeswoman Jill Belcher told FierceHealthPayer in an emailed statement that "we believe the Revive survey is inherently flawed and without merit. More than half of the 403 respondents across 50 states clearly acknowledge that they do not work with us, on negotiations or otherwise."
I'm not going to argue the validity of this specific survey because although the ReviveHealth survey results certainly aren't the end-all-be-all explanation of payer-provider relationships, I think it underscores a larger point--payers must improve their relationships with fellow industry players if they want to remain competitive and viable in the future.
Essentially, as Edwards said, "there are really good business reasons" for insurers to enhance the quality of their relationships with hospitals and other providers. "If you're playing yesterday's game, you view this as zero sum. If you're really thinking about the future and how these relationships are going to work, you have to behave differently than you have in the past."