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