Medical management team discusses data and technology strategy in a conference room

Value-Based Care: Payer Relations

Baker Tilly helps healthcare provider organizations develop and improve their payer performance management process.

Data sharing is enhanced between providers and payers in a value-based contracting (VBC) relationship through the design and implementation of a data and technology strategy. Is your organization ready?

    VBC models require deep collaboration between healthcare providers and their payers. There must be shared objectives, measures and outcomes. Data, information and results must flow freely. In addition, risk must be allocated appropriately. In this environment, success very much depends on the strength of your payer relationships.

    In today’s fee-for-service world, most providers treat all their payers as equal. Few truly understand which payer relationships are performing the best. Fewer still are engaged in a constructive two-way dialogue with their payers about their performance.

    Understanding and shaping payer performance is key to developing the types of collaborative relationships necessary for success as providers take on more risk. Particularly in the early days of VBC contracting, providers will want to be very selective about which payers they work with. Furthermore, they will want to start enhancing those relationships as soon as possible.

    Value-based transformation for healthcare providers

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    “From the development of the actual value-based care contracts through to the sharing of data and measurement of results, providers and payers are going to need to work hand-in-hand if they want these models to work. No two relationships will be the same. Selecting the right payers to work with will be critical.”
    David A. Gregory, Principal, Baker Tilly

    Five key considerations

    1. Manage your payer performance: Develop a robust payer performance management program empowered with the right tools, capabilities and processes to properly assess the comparative value of your various payers. Go beyond traditional volume and revenue measures. Continuously assess key metrics on an ongoing basis. Engage payers in constructive dialogue about performance improvements.
    2. Take it to the C-suite: The leading providers view payer performance and payer relationships as a C-suite agenda item. Engage your executives – and your payers’ executives – in the shift towards the development of VBC models. Ensure progress towards VBC contracting aligns with the organization’s overall strategy.
    3. Expand your contact list: Don’t rely on your current payer contacts to “grow with you” as you evolve. Proactively identify the various stakeholders responsible for VBC model development – including contacts in IT, operations and strategy. Work with them to cultivate relationships and build the strategy towards greater use of VBC models.
    4. Build your data capabilities: Reassess your current data models and capabilities to prioritize data integration and analysis, both internally and externally. Ensure you have robust controls over your data, its access and its management. Given that most payers’ systems and data protocols are different, focus on building “open data” technology architecture.
    5. Develop new capabilities: Consider what capabilities will be required in order to manage the full life cycle of a payer relationship. Develop, recruit or retain key VBC contracting and negotiation capabilities, as well as predictive analytics and actuary skills. Work with IT to enhance data and analytics capabilities.
    “Even absent a wholesale shift to VBC, market trends suggest that the relationship between providers and payers is becoming much more dynamic. Improved data sharing, collaboration and performance measurement will deliver value today and in the future.”
    Michael Patti, Principal, Baker Tilly
    “As payer organizations shift towards risk-based models, they are starting with the providers they have the best relationships with. It’s not just about the longevity of the relationship. They are looking for partners they can trust – those they know have the sophistication and capabilities required to make these models a success. It’s not something you can demonstrate overnight.”
    David A. Gregory, Principal, Baker Tilly
    “This is about changing the nature of the relationship from the transactional to the collaborative. You need to be building the right environment – both internally and externally – to support a much more collaborative relationship between payers, providers and their wider network organization.”
    Michael Duke, Principal, Baker Tilly