Providers and Payers Play Ball

Edward Prewitt, for HealthLeaders Media , June 13, 2014
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This article appears in the June 2014 issue of HealthLeaders magazine.

It's regarded as a truism that, like cats and dogs, like Batman and Joker, healthcare providers will never get along with payers. Yet if these longtime antagonists could somehow collaborate, they'd find common ground in a desire to bring more value to healthcare and shared savings from reducing waste. Maybe, just maybe, they could help each other navigate the shift to value-based care—payers providing expertise in risk management and providers showing the way to redesigned care delivery.

This issue's cover story by Senior Leadership Editor Philip Betbeze (page 10) chronicles baby steps in how the big health insurers, such as Aetna and Cigna, are cooperating with providers. You won't find Pollyanna predictions here that everyone will stroll together into a bright future. Indeed, as noted by Charles Kennedy, MD, CEO of Accountable Care Solutions for Aetna, regarding the traditional model, "In this type of relationship, trust is almost impossible to establish." So, Aetna has developed a blueprint for negotiations with providers that creates a foundation for shared-risk contracting. And providers such as Banner Health Network are using data and analytics to improve the performance of physicians and the health of patient populations, and lower overall cost.

Payment relationships are evolving—more quickly than many financial leaders expected, as related in this issue's finance section article on bundled payments (page 62). "I would love to hang on to the fee-for-service model, but reimbursements are moving at a faster pace than we expected, and we are seeing a large decline in volume," says Jay Picerno, chief operating and financial officer of Barnabas Health, echoing what I've heard from many healthcare CFOs over the past year.

The revenue uncertainty has led Barnabas to take a different tack with its payers this year. "Historically, we have always gone into negotiations and said we want a certain percentage of rate increase. This year … we were looking for market improvement. We tried to flip this into a partnership discussion rather than a difficult negotiation," Picerno told Senior Finance Editor René Letourneau. He is seeking certainty rather than high margins.

Cost control is a constant drumbeat for healthcare leaders today. How does your organization match up? Find out by reading our latest Intelligence Report, The Clinical Strategy for Financial Health: Care Redesign & Standardization, which is excerpted in this magazine (page 26) and available in full at

Please enjoy; I welcome your suggestions and feedback.

This article appears in the June 2014 issue of HealthLeaders magazine.

Edward Prewitt is the Editorial Director of HealthLeaders Media.




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