Evolving Along the Payor-Provider Continuum

The reimbursement world is changing, and collaboration between health systems and health plans has never been more important. Healthcare providers increasingly find themselves accountable for both cost and quality of care in a value-based world, and providers and payors are increasingly engaging in collaborative relationships to move beyond the traditional contracting process, which providers have viewed as adversarial.

The movement toward value-based care is causing an industry-wide shift away from the fee-for-service model of payment for the provision of services, toward one that incents efficiency, outcomes, and patient satisfaction. Traditionally, health plans competed in part by having the most robust provider network in a market. They had a limited set of tools to hold hospitals and physicians accountable for delivering on quality and utilization, and providers often experienced network contracting as a downward pressure on reimbursement with increasing and burdensome requirements and reporting.

Now, value-based payment models are shifting financial risk from health plans to providers.

Success in risk-based contracts will require a different model for collaboration—one in which payors and health systems are equally committed to each other’s success.