What is the confluence of the payer and the provider, two roles that historically have been completely separate? With value based care gaining momentum, providers have started to take on risk, and health plans have begun partnering or acquiring providers. As such, the provider and payer roles have converged to form the payvider.
The payvider model is a vertically integrated approach where the payer and provider share both the risk and rewards of managing member care. An essential component of a successful payvider model is the delivery of cost efficient, quality care - a goal that telehealth and RPM can help achieve. Later in the blog we'll discuss telehealth's role in the RPM model, but first, let's dive into what the payvider model is and how it works for both the payer and the provider.
The Payvider Model
So what is a payvider? A payvider is exactly what it sounds like, a payer + a provider. The idea behind the payvider model is that payviders are able to deliver cost-effective healthcare because as the provider (and the payer), they have control over the care their members receive. When a provider takes on more risk, care is more cost effective.
The goal behind a payer/provider partnership is to:
- Reduce financial risk
- Increase profitability
- Provide high quality medical care and an excellent patient experience
- Improve health outcomes
In the value based care market, providers and hospitals are compensated on quality as opposed to quantity. The amount of money they receive is based on patient outcomes, quality, and cost containment. They are incentivized to deliver the best possible patient care, unlike the fee-for-service approach where providers are incentivized to provide more treatments since payment is determined by quantity of services.
When the payer-provider relationship unifies, the goals of both the payer and the provider are merged. Payers think about risk in premiums, while providers think about risk in terms of the cost of the care they are providing to their patient. For a partnership to be successful, these aims must align.
Three Payvider Models:
- An insurance company shifting to a healthcare provider that offers insurance: Humana announced this strategic shift in 2019.
- Healthcare providers creating their own insurance plans: UPMC and Providence for example, both have their own health plans. Currently, 300+ health systems have their own health plan.
- Joint ventures between payers and providers: Banner Health and Aetna, Aurora and Anthem, Geisinger and Hallmark, are three examples of existing joint ventures
As seen above, there is not a one-size fits all for the payer-provider relationship. It’s likely that more payvider approaches will develop based on payer type, provider type, geographic location, and the needs of the market.
Post Acute Care, Medicare Advantage and the Payvider
As we’ve discussed, if a provider can successfully manage risk, the company will improve its margins and reduce costs - goals that can be achieved in a payvider relationship. Often, payviders have limited visibility into the post acute world - i.e nursing homes, skilled nursing, home health, hospice, etc. And in the commercial population, utilization of post acute services is low - a 25 year old typically does not require a nursing home stay.
For Medicare Care Advantage members however, post acute care is a huge driver of healthcare spending, and one that payviders must tap into to achieve their goals. Our nation is aging - recent data from the US Census predicts that the number of American ages 65 and older is projected to nearly double from 52 million in 2018 to 95 million by 2060. Currently, 60 million Americans are enrolled in Medicare, a market expected to eclipse the commercial market as our nation continues to age into Medicare at a rate of 10,000 people a day. By 2025, Medicare Advantage enrollment in the US is projected to reach 38 million people.
Because of these cost and demographic dynamics, addressing those who are 65-years and older must be a core pillar of the payvider’s strategy.
Payviders already have the ability to manage acute care delivered in the hospital or clinic. But what happens when the member is discharged? How does the payvider maintain the visibility?
The Role of Telehealth in Managing Member Health
With an effective post acute strategy, the payvider will be able to manage member health care beyond the hospital stay or clinic appointment.
Many individuals require post-acute care post discharge. It is the role of the provider arm to ensure the member is sent to the correct place once that member’s needs are identified. The payvider, by identifying high-value post acute providers to include in their contracted network, can continue to have visibility into the care delivered at this stage as well. The payvider helps members choose the correct, high value provider, which in turn reduces the likelihood of readmission (due to the high quality care), improves overall patient outcomes, and helps to manage costs.
Two huge components of this strategy are transparency, and accountability. The payvider must remain abreast of the care being delivered. From a cost reduction and avoidance perspective, managing the post-acute length of stay and avoiding readmissions and unnecessary ED visits is absolutely critical.
This is where telehealth technology comes in. Telehealth bolsters care coordination - it helps the provider team follow the member post-discharge. Telehealth enables the exchange of clinical information in real-time, it facilitates continuous communication between the member and their post acute provider.
Telehealth and RPM solutions allow the member to remain connected to their clinician from the minute they are discharged from the hospital, through the transitionary period, and into the recovery stage. In other cases, telehealth serves as a touch point between clinic visits. It helps members understand and manage their health, which, in turn, results in better health outcomes.
Continuing the Conversation
The transition from fee for service to value based care has shifted how we think about risk, especially performance risk for providers. It has inspired conversations around how providers can balance their risk portfolios, and what taking on more risk actually means for a health system or provider network. It has shifted how we think about healthcare delivery, and how we consider population health programs within our delivery strategies.
In blogs to come, we’ll discuss payment structures, the importance of the social determinants of health, primary prevention, and a robust population health strategy, as well as how payviders can lead the charge in reducing readmission and ED utilization amongst their members.
