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It's time for payers to build trust, partnerships with providers

Jim O'Neil

San Francisco really is a lovely town, and I was happy to spend time there last week at the AHIP Institute. After three days filled with conference sessions and meetings, I sat down in the beautiful Yerba Buena gardens to sift through my multiple pages of notes and realized one of the key take-away messages from the annual conference: payers and providers must make nice.

I know this isn't earth-shattering advice, but with so many changes and reform initiatives coming down the pike, the industry is at a critical juncture. Regardless of how the health reform appeal efforts play out, or whether health insurance exchanges are formed or whether accountable care organizations are successful, both sides of the healthcare industry must join together and let animosity fall to the wayside.

Former Sen. Tom Daschle (D-S.D.) addressed payer-provider collaboration in his brief 15 minutes remarks, calling it "critical" during these "tremendously transformational times."

Analysts from Deloitte Consulting concurred. "We need much more collaboration between health plans and providers," Dhan Shapurji, director at Deloitte, said during a discussion of the challenges created by exchanges. Referring to ACOs' ability to accomplish cost savings, Deloitte's healthcare practice director Robert Williams told me that payers "can't be silo-based anymore." As the industry inevitable shifts to a more value-based system, interdependency between payers and providers will be key, he added.

And Eric Logue, director of Navigant's healthcare payer practice, stressed that partnerships between payers and providers should be more transparent. "Plans must share information with providers, and providers must trust that information is correct," he said. That's a problem, however, because health plans and providers "don't speak a common language." Logue urged both sides to work together, because as reform continues to push the healthcare industry toward new payment models, the changes will have a "dynamic impact on payer-provider relationships."

As the industry experts extolled the virtues of teamwork, it was clear that, just beneath the surface, they recognized what a tall order they are recommending. "There's been no sharing of information in the past," Logue said. The pros from Pegasystems agreed, adding that payers are more interested in collaboration than providers right now. Something has to be done, they warned, because "status quo" doesn't work anymore.

I know there's some bad blood between payers and providers and that both sides like to play a game of chicken with each other, particularly during contract negotiations. But c'mon, we are adults in the real world, not third graders on the school playground. Payers and providers are two sides of a comingled and interdependent industry, not scorned lovers refusing to be the first to apologize or a divorcing couple using fear as a negotiation tool in deciding child custody.

Isn't it time to step up to the challenge of the times and be the bigger person (or industry segment), the one able to take ownership of previous mistakes and their role in an adversarial relationship, and vow to move forward without grudges? It would be good for the industry, and who knows, it could be the start of a beautiful relationship.

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Comments (2) | Post a comment


As in many fantasies, like a mutually happy divorce, this is great conceptually. Both sides have to set ground rules and define these before even sitting at the table. These ground rules must guide the discussions and focus on Quality, Value and Improving Health- not just of the participants, but also the Community. And maybe have a third party (or two) there to remind them of the ground rules periodically.

This article is emblematic of the problem. You make us out to be petty argumentative children by your statments. In actuality, there is much more to it than your gross over-simplification. First of all, most insurance companies, eg. payers, have as their primary goal, to increase shareholder wealth (it's a business). The goal of most physicians (ne: providers) is to provide the best care for their patients. These goals are not likely to ever coincide in the real world. Put simply, providers are on the wrong side of the payer's balance sheet. We have such different incentives, that it is ridiculously petty to make the argument that we just don't want to play nice with each other. Put another way, you are asking providers to coddle up to the very groups that have arbitrarily and systematically bundled codes, and refused to pay legitimate claims to them for the last 15 years. This has been confirmed by numerous court cases, settlements, and fines by multiple state insurance commissions.

I know we have to find solutions. Shared data is helpful, but to not understand the real nature of this conflict, is to doom future efforts to find common ground. And yes, a single government payer would fix it, but that's not likely to be acceptable to most Americans, unlike their European and Canadian cohorts. And good luck finding a doctor if we do that here.

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