What Issues are ‘Payviders’ Working to Solve?

Dec. 12, 2019
As more joint ventures are formed, Jefferson Health’s David Nash, M.D., discusses the importance of aligning incentives

In the new era of value-based care and shared risk, a term that is popping up more often these days is “payvider” to describe new kinds of organizations or partnerships. But what is a payvider and what issues are they working through?

In a Dec. 11 webinar, David Nash, M.D., M.B.A., founding dean emeritus of Jefferson College of Population Health in Philadelphia, explored this issue in a discussion with David Nace, M.D., chief medical officer at population health platform vendor Innovacer. In fact, Nash noted that the Philadelphia area is likely to see at least two new “payvider” joint ventures announced in 2020.

 Nash said he first started hearing the term payvider earlier this year and initially thought it applied to provider-owned insurance companies such as Geisinger. But of course there are other types of joint ventures being formed between traditional health systems and insurers that also may fit the term, he noted. He called the move from volume to value inexorable, but added, “I believe it is not going as fast as I would like, and I think the policy community generally believes it hasn’t moved fast enough.”

 He said the key to value is to get payers and providers to align incentives, regardless of the organizational arrangement, and there is still a long way to go to get there. “It is all about going upstream to shut off the faucet instead of continuing to mop the floor.” In other words, paying for home care visits may help keep people from expensive emergency department visits that end up with worse outcomes for patients.

 Speaking of the Philadelphia market, Nash said, “Today healthcare is the biggest business in the region. We have four major medical schools. We have a lot going on, but achieving payer and provider alignment is not one of them.”

 Although many provider organizations have added insurance companies, Nash, who is also a board member at Humana, noted that there are “lots of casualties on the road of providers trying to become insurance companies.” Joint ventures might be the model going forward, he added, because provider organizations and insurers have different operating models and skill sets. “Hospital leadership teams are not going to throw a switch and become experts in insurance risk bearing. That is not going to happen.” New collaboration models, on the other hand, offer lower barriers to entry and require less capital, he added.

 Nace brought up several recently announced partnerships as examples of payvider joint ventures, including one involving Geisinger and Highmark in four Pennsylvania counties. Nash said Geisinger has great expertise in these types of arrangements. “This is their core business,” he said. “This is a great barometer and a symbol of where the market is going but is not broadly applicable. There is no question that Geisinger clinicians have a different culture than we do at Jefferson. To survive and thrive in a risk-bearing environment is different than what we have. Most hospitals would agree. You can’t create a Geisinger culture overnight in a provider organization.”

 Two other examples Nace mentioned involve Blue Cross Blue Shield of Minnesota and provider organization North Memorial Health, and Anthem and Aurora Health in Wisconsin.

 Nash noted that in big East Coast metropolitan areas such as Philadelphia, New York, Washington and Baltimore, “we are just learning how to do this. Most change as it relates to the payvider evolution is coming from West Coast to East Coast, just like capitation did. We are not culturally there yet in terms of knowing how to manage risk, but the change is going to come, but it is coming from west to east.”

 During the webinar, Nace took the pulse of the 500-person audience by asking about the relationship between insurers and clinical organizations. In response to a webinar poll, 10 percent of respondents said they share data in near real time; 53 percent said they share data according to need; 26 percent said they barely interact at all; and 11 percent said they work in silos.

.Nash said that if organizations want to deliver evidence-based, high-quality and harm-free care, they need the right team, shared data, and aligned economic incentives. That requires transparency and accountability. “That is the only way we are going to reduce unnecessary testing and reduce harm such as inappropriate surgeries,” he said. The only way to reduce wastes is to align incentives.”

 He added that these efforts to align incentives must include examining the role of the specialists, not just primary care.  “When I refer to a cardiologist and she doesn’t get back to me or she orders unnecessary tests, that is not going to work in a payvider joint venture,” he said.  For these ventures to work, we have to have all providers, including specialists and primary care, get it. When we get to these models, it may be that not every specialist is going to be welcomed into the tent. In fact, it may be that as many as half aren’t going to be in that tent — if they are poor communicators or have poor outcomes. We may be at that Malcolm Gladwell tipping point. I think we are there, but it is not an effort for the weak-kneed. It leads to some very difficult conversations.”

 In response to another audience poll, a combined 35 percent said they either don’t have the technical capability or access to the data they need to be successful in these arrangements. Others said they needed access to more social determinant of health data and care coordination. Without an adequate data-sharing platform, this type of transformation is not going to be possible, Nash noted. He added that just providing  social determinant of health data without the aligned financial incentives would just be frustrating to providers. You have to have the tools, actionable data and aligned economic incentives. “They have to go hand in hand. Otherwise, you are going to frustrate a generation of providers.”

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