Payer-provider convergence: What IT considerations to make as ‘payvider’ becomes reality

Achieving the “payvider” business model requires simplifying existing processes and bridging many information silos.
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Payer-provider convergence: What IT considerations to make

Efforts to break down inefficiencies between providers and payers has put healthcare IT organizations on the front lines.

In so-called “payvider” models, health systems may establish their own health plan or partner closely with an existing payer. In either case, the objective is to bridge information silos, streamlining processes and coordinating care with the ultimate goal of improving health outcomes at reduced cost.

“It’s a great a great opportunity to work together, rather than independently,” said Pam Jodock, senior director of health business solutions at HIMSS. “The level of partnership we’re seeing evolve, especially as it relates to downside risk, creates a win-win for both organizations. It helps the provider organization make immediate course corrections when appropriate, and it also helps the payer in managing [its] costs and improve [its] relationships with providers.”

While the “payvider” concept has been around for decades, reforms to Medicare and the Affordable Care Act (ACA), both of which incentivize and penalize providers around health outcomes, get most of the credit for the switch from fee for service to pay for value. However, Jodock and others say new consumer expectations are playing an equally important role.

“As a consumer, you don’t want to be necessarily forced to use one [provider] or another,” said Alan Hughes, president of the global healthcare and life sciences practice at NTT Data Services. Consumers who can bank from their smartphones increasingly expect the same fluidity and choice when it comes to medical treatment. “Empowered consumers” are behind the quest to integrate healthcare data and processes, he said.

Another force is what Michael Parkerson, an industry leader and former chief strategy officer for Blue Cross Blue Shield North Carolina, called the “affordability crisis.” “It’s driving the need to identify and eliminate inefficiency,” he said.

Data, insight, action

Achieving the “payvider” business model obviously requires bridging many information silos. But an even more important step comes earlier: simplifying existing processes.

“Sometimes we digitize before making a process efficient,” said Parkerson, adding that healthcare is “data-rich but insight poor and activation absent.” The good news, he said, is that vast opportunities now exist for taking existing data, such as a patient’s digital records (claims, clinical results, financial status, consumer activities and lifestyle habits), analyze them and provide insights to clinicians at the right moment. Similarly, other systems could activate the patient’s networks, be they other healthcare professionals or friends and family.

Reduce variation

For Hughes, a disciple of the 6 Sigma process improvement methodology, another IT problem is the profusion of “solutions to any given business process.” This is one place healthcare IT organizations can start preparing for the “payvider” revolution because excessive variation drives costs, he said. He expects industry consolidation will help with this. “Over time, you’ll see rationalization with a smaller set of technologies from a processing perspective and somewhat more standardization than we see today,” he said.

But gaps remain, particularly on the financial side. “In those situations where there is financial reward or penalties associated with contracts, [you’d] need to determine what portion of risk to assign to each of the providers touching that patient in that episode of care,” Jodock said, citing Medicare. “But we do not have the technology or processes in place to follow and record those activities.”

All three experts were optimistic that infrastructure changes, such as the adoption of the public cloud as well as the use of advanced analytics and AI, will help address current inefficiencies inside and between clinical and financial networks.

Cultural issues

Yet all three are equally convinced that the biggest impediment to the “payvider” movement isn’t technology per se.

“The technology challenges can generally be worked through,” Jodock said. The bigger challenge is a cultural one — the long-standing adversarial relationship between healthcare providers and insurance companies. “Even if you have the technology to support the business functions as being proposed, you need both parties to be able to trust one another ... that the data they’re sharing [are] accurate, the data they’re sharing [are] going to be used appropriately, and not used against them … etc.”

Jodock’s advice? Find one person in each organization who wants to build the relationship and act as ambassador. She also stresses the need for transparency. “Talk about the problems you want to solve and be honest about what you can bring as a solution,” she said, adding, “Don’t make promises you can’t keep.”

NTT Data’s Hughes agrees. “I don’t believe this is a technology issue; it’s a business philosophy issue,” he said. While providers and payers desire seamless solutions, he said they first need openness and common goals and a plan for sharing in the rewards of keeping people healthy.

Top priorities for payvider convergence

How do IT leaders ensure that their organization is prepared for the payvider convergence? The top priorities should encompass:

  • Collaborate with your peers to ensure there is a clear strategy and measurable objectives for your organization’s efforts to either stand up a health plan or work more closely with payers.
  • Don’t tackle technical solutions until there are clear business objectives and requirements from your stakeholders.
  • A robust data governance model is essential to realizing the benefits of the payvider convergence, especially when it comes to identifying which source of data will be considered the “source of truth” between EHR data, claims data and other third-party sources of information.

With this strategy in place, healthcare organizations will be able to not only manage this transformative and disruptive convergence but thrive in this new healthcare ecosystem.