Journal of Healthcare Management - November/December 2013 - (Page 395)
I N T E G R A T E D
h E A L T h
s y s T E m s
Fewer, but Tighter, Payer Relationships
Expected to Underpin Integrated Health
System Strategies in the Future
Daniel K. Zismer, PhD, Wegmiller Professor in Healthcare Administration and director,
MHA and Executive Studies Program, University of Minnesota, Minneapolis
W
hile not independent of each other, the U.S. healthcare provider and payer
systems have, in the main, been far from completely collaborative or interdependent for as long as both have existed. Each component of the industry has essentially operated in reaction to the other. As health insurers consolidated and became
stronger over time, providers came to see them as a tolerated necessity of a complex
healthcare financial landscape and a means by which to receive "wages" for services
rendered. In response, hospitals and physicians have consolidated to enhance market
position and pricing power.
Considering existing pressures and new market conditions stemming from the
influence of the Affordable Care Act, leaders of large, integrated health systems are
contemplating future strategies underpinned by "tighter" working relationships with
fewer, but larger, payers, whether through ownership, legal integration, or contractual
health insurance product partnership strategies.
What does this mean? Large, clinically sophisticated, and geographically diverse
health systems will likely derive a growing proportion of patient services operating
revenues from a few large payers through contractual arrangements that apportion the
financial risks associated with clinical outcomes and total costs of care between the
parties according to more tightly negotiated terms over extended periods of time-
that is, longer-term financial risk-sharing arrangements.
How might such relationships work? The provider and insurer accept the financial responsibility for reliable access to care, clinical mistakes, readmissions, corrective surgical procedures, and so on. In such arrangements, the buyer receives
predictable healthcare cost inflation rates and related guarantees and warranties of
quality and cost over time, and in exchange, the provider-insurer partnership secures
markets for predictable periods of time.
Through such tighter relationships, the provider-insurer partners can focus
resource investments and innovation efforts on the following:
* Population health strategies
* Total cost of care management interventions
* Productive patient or enrollee engagement resulting in changes in health
services use behaviors
395
Table of Contents for the Digital Edition of Journal of Healthcare Management - November/December 2013
Journal of Healthcare Management - November/December 2013
Interview With John W. Bluford III, FACHE, President and Chief Executive Officer, Truman Medical Centers
REAL Data Collection Essential for Care of Vulnerable Populations
Fewer, but Tighter, Payer Relationships Expected to Underpin Integrated Health System Strategies in the Future
Healthcare Employers’ Policies on Nurse Education
Reducing Preventable Emergency Department Utilization and Costs by Using Community Health Workers as Patient Navigators
Engaging Primary Care Physicians in Quality Improvement: Lessons From a Payer–Provider Partnership
Implementing High-Performance Work Practices in Healthcare Organizations: Qualitative and Conceptual Evidence
Journal of Healthcare Management - November/December 2013
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