Healthcare providers and payers have long had contentious relationships, and some of those battles over claims and reimbursement for care have been bitter.
After years of opposition, providers and payers are finding themselves as necessary bedfellows, prodded along by the shifting reimbursement incentives posed by value-based care.
For payers and providers to succeed under value-based care, they need each other’s data and cooperation, as they see their financial incentives begin to align around the need to provide high-quality, cost-effective care.
Close collaborative efforts between providers and payers are only beginning to emerge, as pioneers begin to wrestle with some of the technical challenges of sharing data, both for individual patients and for larger populations. Early efforts focus on becoming more transparent in sharing patient data, but they’re finding a growing need for sophisticated IT, especially by providers.
These early initiatives are harbingers of future cooperation between providers and payers, but they also show that other issues—including legal and operational obstacles—still need to be overcome. Success in these collaborations is crucial to making a successful shift to value-based care.
Limited data sharing
Problems with data sharing are one of the biggest barriers to future provider-payer cooperation in value-based care. Lack of willingness to share information needs to be overcome.
Two healthcare industry surveys conducted in late 2016 found that the lack of data sharing was impeding provider-payer risk-sharing initiatives. One study by Premier, a group purchasing and quality consulting firm, found that only 22 percent of commercial payers shared claims data with providers to better manage cost, quality and coordination of care. The second, by the American Medical Group Association (AMGA), reported that the transition to value-based care actually slowed between 2015 and 2016, in part because of the lack of payer data.
Health plans generally balk at sharing their patient information with providers, says Chester Speed, AMGA’s vice president of public policy. That’s important information for providers to access, because payers’ claims and health information can provide a more complete view of patients’ health issues and provider interactions.
However, some payers believe that providers are not technologically ready to manage payer data. That puts unprepared providers at a disadvantage, because the inability to take in and manage payer data limits their ability to succeed with value-based care contracts.
“Not every provider is set up well to take risk,” says Catherine Field, market president of the four-state Intermountain region of Humana. A risk-based arrangement involving only a small volume of health plan membership puts a provider at an extreme disadvantage, often because the provider is not able to pay for the associated technology and care management overhead.
It’s too much risk for many payers to tolerate, because working more closely with providers in these arrangements could increase the risk for both, Field says. “We have to be confident that they’ll be successful at it, and it does take some infrastructure investment to become successful.” After a health system achieves proper scale, “the challenge today is getting data in a format that is easy to access, that’s accurate and is actionable.”
What’s more, she says, every provider is at a different level of readiness to receive and use the claims data.
Even though providers and payers see the logic in sharing data for value-based care contracts, there’s reluctance because the industry is in transition on this form of reimbursement—most coverage plans still involve fee-for-service approaches, which often means payers and providers are still adversaries in settling claims.
For the most part, payers and providers still have “different sets of business interests,” says William Bernstein, chair of consulting firm Manatt Health.
Conflicts also arise when an initiative starts setting up sharing arrangements. “There’s collaboration,” he says, “but people want to control the terms of the collaboration through being the data repository and the source of truth” in the relationship.
Gradually, payers are realizing that they can’t dictate how providers should run the new joint programs and that they have to establish true partnerships for value-based approaches to succeed, says Mitchell Morris, executive vice president of OptumInsight, an analytics business that merges claims and clinical data into a useful form for such partnerships.
Providers that typically are protective of their clinical data must be as willing as payers to intermingle vital ongoing details of patient information, Morris says.
However, some examples are showing that providers and payers can weather this challenge and achieve joint benefits. For example, an evolving relationship between healthcare systems and payers in Minnesota demonstrates the gains in quality and efficiency that follow from the free flow of data.
About 10 years ago, payer contracts with Allina Health included incentives structured around the total cost of care to health plan members; under those deals, the health system was eligible to receive bonuses for meeting performance targets, says Duncan Gallagher, Allina’s recently retired chief financial and administrative officer who oversaw those service contracts.
Achieving results that merited bonuses was difficult, Gallagher says. For example, it was especially frustrating when Allina found out after a performance period that it didn’t hit its target, based on the claims system from which payers reported the results. “That engendered some distrust and lack of faith in that process,” he says.
Some of those challenges were eased about seven years ago, when Allina linked with HealthPartners, a combined healthcare system and insurance plan, to launch the Northwest Alliance, an accountable care organization. Clinical data from participating care sites and claims data on 30,000 health plan members attributed to the ACO have been leveraged to identify improvement opportunities and measure success against targets, Gallagher says.
The effort yielded improved cost trends and care outcomes, compared with Allina’s efforts in the rest of the Twin Cities market. “The parties trust the data, trust the process and have worked together to the benefit of the members,” he says. “If you can get the economic alignment between the parties, other things will fall in place. And that contentiousness, while it won’t disappear, will at least be diminished somewhat.”
For a provider-payer collaboration to make use of merged data feeds, the partners need economic alignment with shared incentives, and a measurement and improvement system that offers analytics capabilities, says Kyle Salyers, senior vice president of corporate development for Health Catalyst, a vendor that develops and operates analytical databases for both health plans and integrated delivery systems.
“An analytics platform and expertise is required to bring together claims and clinical data,” Salyers contends. That requires a technology base that takes financial, clinical and operational information from very different points of origin to inform current care for patients and longer-term care management.
Allina began building that base 10 years ago, adding data warehouse and analytics capacity through in-house development, Gallagher says. The analytics initiative turned into a separate division of Allina. In January 2015, Allina outsourced that division to Health Catalyst in a 10-year, $100 million agreement, realizing it could not continue internal technology investments.
Similar sharing initiatives have helped both providers and payers manage risk contracts. Humana has experience working with providers, in ways that take into account their technical acumen.
For example, in Washington, Oregon and Des Moines, Iowa, collaborative payers have furnished multispecialty clinic organizations with claims data and the analytical tools, enabling them to combine those tools with internal clinical data and better assume varying degrees of risk for contractual performance targets that match providers’ technical and operational readiness.
Throughout Humana’s region of Washington, Oregon, Utah and Idaho, 75 percent of its membership in Medicare Advantage plans are covered by “path to value” contractual relationships with provider entities, which can be anything from shared savings to full risk for improvement targets, says Field, the regional market president.
Three years ago, Vancouver (Wash.) Clinic was not prepared to enter into such a relationship, but it had just hired a new CEO, Mark Mantei, who had experience in managing risk and was charged with putting Vancouver in a position to participate. Field says contractual terms allowed the clinic “to walk into risk over a number of years, so they could get good at building systems and processes to help them manage care well.”
Humana has a team that works with Vancouver Clinic to customize reporting to its needs, leveraging a self-service reporting tool called CareBook, from DataLink, to produce more than 50 types of reports on Humana members. The clinic, which operates on an Epic IT platform, uses that vendor’s Healthy Planet population management module to isolate information on all Humana members.
Wellmark, the Blue Cross Blue Shield plan for Iowa, started five years ago to develop ACOs initially with the most able integrated health systems, and Iowa Clinic was invited aboard in the second year, says Edward Brown, the clinic’s CEO.
“Wellmark went about this in a very progressive, incremental manner to bring the providers along and allow them to morph into a situation to begin to take on risk,” Brown said.
A software system from 3M Health Information Systems contains all of Wellmark’s claims data on attributed members, and each participating healthcare provider organization has access to its own data. Iowa Clinic also invested in analytical tools to evaluate its performance, including tools from Optum and Lightbeam Health Solutions.
Wellmark’s data-sharing does not extend to letting providers download and comingle claims data; it’s still proprietary, kept inside the 3M HIS warehouse for read-only viewing by providers. In the future, providers will need more than just a glimpse of payer information, Brown says.
“I don’t see how we move from fee-for-service to pay-for-value without being more transparent about the data,” he contends. “It can occur incrementally, but [these relationships] can’t reach their full potential” with such openness.
However, Wellmark is concerned about too freely sharing its data with providers; Brown says the company fears competing payers might access its data if it is put into the hands of providers.
Antitrust issues also loom. For example, the potential for collusion is a significant issue for Wellmark, because it has a 73 percent share of the Iowa commercial market, Brown adds. But all provider organizations have the same contract with Wellmark, and all get paid the same way.
Wide access to claims data in a market also can create antitrust concerns among providers. For example, if competing entities see the whole claim from a payer, they can find out the pricing the payer is using for competitors, says Robert Belfort, a partner with Manatt Health.
In another example, an enterprise operated by a hospital that is taking risk and to which its participating doctors are making referrals may use payers’ claims data to compare its rates with those of other competing institutions—it then could use that information to negotiate its own rates to nearly match providers that charge higher rates, netting more income, Belfort explains.
Or one provider organization might use a payer’s claims information as the basis for contacting another provider organization with which it competes to make a deal. “Once competitors know what their respective pricing is, they can collude with one another: Hospital A can go to Hospital B and say, ‘I see you’re getting 15 percent more than me—we should both agree to negotiate something in between what we’re getting, and we won’t undercut you that much.’ ”
It’s simple enough, however, to strip out pricing, share only the encounter, and use per-claim data to measure quality of care and effectiveness, he says. Cost information also can be aggregated into meaningful statistics without disclosing individual payment amounts.
Data sharing results
That’s what effective provider-payer collaborations are doing, and the resulting clearer picture of individual and population health has been paying off in fewer hospital admissions and readmissions, higher quality scores and lower total cost of care.
For example, Iowa Clinic reduced per-member, per-month costs of Wellmark members by $29 in 2014, another $29 in 2015, and $55 in 2016, with the savings shared between the two partners, says CEO Brown.
Vancouver Clinic’s admission rate has declined to fewer than 180 per 1,000 population, reflecting a high degree of sophistication in managing people’s health problems, and its rate of 30-day all-cause readmissions is below 9 percent, thanks in part to effective post-hospital follow-up care. Its overall Medicare Advantage rating, which was below 3 on a 1- to 5-point rating scale when it began collaborating with payers, stood at 4.7 in 2016.
“That is tremendous improvement in their quality metrics,” says Field of Humana, “and a lot of that had to do with very close partnership and alignment of our organizations, and sharing of data.”
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