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9 steps to build an effective payer-provider collaboration

Recent successes in creating payer-provider partnerships show some of the steps payers and providers can take in order to create effective collaborations.

With collaborative healthcare proving to be a model for the near future, providers and payers need to understand how to choose their partners, decide what is critical to both and be flexible so they can mutually realize savings.

[See also: Minnesota Blue's new contracting model geared toward ACO development.]

Collaboration can be as simple as organizational incentives for fee-for-service improvements or shared case management functions around transitions of care. It can also be a comprehensive joint savings arrangement in which the payer and health system benefit from lower costs for an employer or any risk pool, said Loren McCaghy, a principal of Lichlyter Consulting. 

"We're all in this together, and there are common reasons to work in collaboration," he said in a recent webinar.

Here are nine steps to realize effective collaboration from the experience of payers and providers:

1-Create mutual objectives. The objectives may be to build new revenue growth, a response to developing accountable care and other shared accountability models, or a local market response to rising healthcare costs. Collaboration "created a new dynamic in our marketplace, and it was one as an economic relationship and not an integration," said Dan Sacco, vice president for strategic affairs and managed care at Boca Raton Regional Hospital, about his collaboration experience.

2-Establish joint governance. This could be something like a steering committee, which develops operating rules, roles and scope of the collaboration.

3-Engage leadership. The vision has to be shared from the CEO on down in each organization. "There is a lot of change and discomfort occurring within both the organizations when you embark on this, and it takes a very committed and focused CEO from each of the organizations to drive and manage that change," said Allan Boshell, vice president of network services at payer AvMed Health Plans.

4-Assemble a select network of quality providers. Collaborators decide what the network will look like and who should be primary providers, the foundation of a patient-centered model.

5-Create a value package of benefits and technical capabilities. "Introduce technologies with the product to help employers and members get actively involved in their health care," Sacco said. Include tiered benefits and penalties for not using the collaboration's network.

6-Share clinical and claim data. The health system and payer need to be able to access and mine the intelligence that each partner holds. This will allow them to move toward collaborative management of individual patients and population and to better measure outcomes.

7-Be transparent when creating a rate structure. "The days of almost showing all the data so I can negotiate a better deal with you or you sharing almost all your data so you can get one over on me are over. You have to set all of that aside," Boshell said.

8-Share cost of implementation and risk. "Everyone has to pony up some money. Everyone has to have some skin in the game. They need to be able to feel the pain while seeking the success, not only with insurance risk but political risk from the community. There will be pushback and blowback." Boshell said.

9-Align reimbursement. Rewards have to be shared. If care management is performed better, costs come down and patient experience is better. "Everybody needs to be able to celebrate a little and put a little net on their bottom line," Boshell said.

[See also: Bundled payment initiative to lower costs, help coordinate care.]

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