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Our Take

A new era of payer-provider relationships

15 Minute Read

The physician landscape has changed drastically in recent years, largely due to an acceleration of provider consolidation and the entrance of new entities looking to disrupt the market. Today, more stakeholders than ever are competing for physicians’ attention—making it especially challenging for health plans to engage providers. Yet at the same time, health plans have clear and distinct opportunities to partner with providers to advance strategic goals.

Read on for our take on how health plans can usher in a new era of payer-provider relationships by enabling physician partners.


What does payer-provider relations mean in practice?

“Payer-provider relations” is a term commonly used to describe the relationship between health plans and providers—most notably frontline physicians. In practice, a health plan’s provider-relations staff can have a wide range of responsibilities, spanning operational tasks (such as credentialing and contracting), strategic undertakings (such as implementing value-based care and strategic partnerships), and tactical roles (such as referral and site-of-care management).

Throughout this page, we will use the term “provider relations” as a reference for where the health plan’s operational functions overlap with the plan’s ambitions for its provider partnerships. While plans must foster positive relations with a diverse set of providers, this document primarily focuses on physicians given the central role they play in care transformation and medical cost management initiatives.


Challenging conventional wisdom

Partnerships with providers are critical to the success of many payers’ goals. Because providers often interact with patients more frequently—and on a more personal level—than payers, health plans may rely on support and assistance from providers to achieve certain strategic priorities. As such, health plans are continually looking to improve their relationships with providers, most notably physicians.

As plans craft their provider-relations strategy, it’s important to consider recent shifts in the physician landscape, including those that run counter to conventional thought. Two key misconceptions about the provider landscape are especially noteworthy:

Misconception #1: The physician landscape is binary.

The physician landscape historically has been seen as binary, with providers often falling under one of two employment types: hospital-employed physicians or independent physicians. But today, the physician environment is much more nuanced and dynamic. As the graphic below shows, physicians can be employed by or partnered with a host of different organizations:

Misconception #2: Physicians are losing autonomy and agency.

Conventional wisdom assumes that physician employment or ownership status dictates how a provider acts or behaves. However, new disrupters in the physician space provide more options for employment, ownership, and partnership; as such, physicians are no longer settling for unliteral arrangements that offer only financial security. Instead, physicians—especially independent physicians—want bilateral partnerships with their stakeholders, including health plans. That means engaging physicians in strategic partnerships requires partners to offer physicians autonomy and an active role in determining how to achieve desired goals.


Our take

Ultimately, when crafting their provider-relations strategy, payers must remember that physicians—especially primary care physicians (PCPs)—play a critical role in payers’ care transformation and medical cost management goals. PCPs can be the most effective point of impact for containing health plans' member costs and closing care gaps.

But as the physician landscape continues to change, more stakeholders than ever are competing for physicians’ attention. That means it’s increasingly challenging for health plans to engage providers, and to keep them engaged, in plans’ strategic initiatives.

So, how can payers best appeal to and support physicians?

Traditionally, when we think of what payers can offer physician practices, we think of services including:

  • Care management or population health data analytics
  • Clinical support, such as embedded staff
  • Financial support that enables providers to make necessary investments in their total-cost-of-care infrastructure

However, newer entities in the market (such as private equity groups or physician enablement vendors) now offer physician practices those same resources—meaning those offerings are no longer “nice to haves,” but are now baseline services that all physician partners must be willing to offer. Health plans must go a step further to differentiate themselves as an enabling, attractive partner for physicians.


How plans can set themselves apart: Two provider-centered approaches

Physician-focused efforts can help improve payer-provider relations in ways that support health plans' strategic goals. Here, we'll examine two such approaches:

1. Equip providers with tools to support more effective uses of plan-provided data.

One way payers can stand out is by sharing their wealth of patient data with physicians. But it’s important to note that merely sharing the data is not enough. Providers want meaningful, actionable data that they can use to inflect change. Therefore, payers must reevaluate the data analytics they offer to assist in care management, ensuring that the information is both valuable and palatable to physicians.

2. Streamline intra-plan dynamics to simplify payer-provider relations.

Payers must also ensure they’re interacting with providers in a streamlined, convenient manner that reduces noise and administrative burden. Refocusing provider-relations efforts to be more enabling (and less burdensome) will position plans to be true partners with providers—and in turn could help to drive a plan’s key strategic initiatives forward.

In the following sections, we take a closer look at how health plans can implement these two provider-centered approaches.

  • Approach

    Equip providers with tools to support more effective uses of plan-provided data

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  • Approach

    Streamline intra-plan dynamics to simplify payer-provider relations

    Read More Collapse

Parting thoughts

The health care industry as a whole—but the physician landscape, in particular—is rapidly evolving and increasingly nuanced. As health plans look to secure provider partnerships, they’ll need to carefully consider how to differentiate themselves from the rising number of entities vying for physicians’ attention.

Health plans have a unique opportunity to serve as an effective partner to physicians in addressing care gaps, improving quality of care, and furthering value-based care initiatives—while aligning financial incentives for doing so. A successful physician-centered, data-driven provider relations strategy is key for health plans to distinguish themselves as a valuable partner in today’s competitive market.

But to reach this ideal end state, the clinical and data voices within the health plan must work together intentionally to streamline interactions with physicians, while offering the data and resources that enable change.

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