New Marketplace
Payer-Provider Antagonism and Integration

New Marketplace Survey: Payers and Providers Remain Far Apart

Insights Report · March 1, 2018

Analysis of the NEJM Catalyst Insights Council Survey on the New Marketplace: Payer-Provider Antagonism and Integration. Qualified executives, clinical leaders, and clinicians may join the Insights Council and share their perspectives on health care delivery transformation.

Download Full Report

Advisor Analysis

By Leemore Dafny and Namita Seth Mohta

Most analysts of the U.S. health care system believe poor integration of care and services is a primary driver of high health care spending (albeit likely second to price levels). According to our NEJM Catalyst Insights Council survey on payer-provider integration, a lack of alignment between payers and providers inhibits that integration. Without aligned goals and balance sheets, the industry continues to struggle to deliver the highest quality of care at the highest value to patients.

The survey, conducted among executives, clinical leaders, and clinicians, finds that three-quarters (77%) of respondents do not consider payers and providers aligned toward realizing improved value in care delivery. More than half (58%) feel their own organizations are not aligned. Only 3% of respondents say payers and providers are extremely or very aligned at the industry level.

How Aligned Are Payers and Providers in Working Together to Achieve Value-Based Care

From the New Marketplace Insights Report: Payers and Providers Remain Far Apart. Click To Enlarge.

When you dig down into specific dimensions along which alignment could occur (quality, member/patient experience, cost, care coordination, leveraging data for decision-making), the only dimension that ranks somewhat highly is quality, with a slight majority of respondents (52%) reporting that payers and providers are aligned, very aligned, or extremely aligned. The survey findings are particularly negative on cost of care and the use of data to make better decisions for system improvements, with more than two-thirds of respondents saying payers and providers are not very aligned or not at all aligned.

Many in the industry — ourselves included — thought risk-sharing arrangements would help align objectives of different providers along the care continuum and ultimately yield more integrated care. Our survey reveals that fundamental tensions between providers and payers remain. Some written responses indicate that providers consider themselves patient advocates, and they perceive payers to be overly focused on cutting spending.

Integrated payer-provider health systems, such as Kaiser Permanente, appear to be the exception to this perception; two-thirds of survey respondents say these organizations have made progress toward innovative, risk-based payment arrangements.

Although integrated payer-providers such as Geisinger Health System do indeed exhibit more innovation in care delivery, says NEJM Catalyst Leadership Board Founder Thomas H. Lee, MD, MSc, it is “so much less than is possible, or that we are likely to see in the years ahead.”

There also is a question of which stakeholder (payers, providers, government, employers, patients) has the most potential to influence payer-provider collaboration. Our survey puts payers slightly on top, with half of respondents naming them the most influential. Health care providers come in a close second place at 48%.

Unlike many industries where the private sector typically takes the lead in driving change, our survey confirms other research that in health care, government payers set the blueprint for private payers to piggyback on. Respondents rate regulatory payment model changes (such as from Centers for Medicare & Medicaid Services) as the most influential among drivers to improve payer-provider collaboration. From fee-for-service payments to bundling, and now accountable care organizations, the public sector has pushed and prodded the industry toward alternative payment models that incentivize collaboration — if not between payers and providers, then at least among different providers. Hence, respondents believe CMS can play a large role in facilitating the next layer of collaboration.

Unsurprisingly, incentives play a critical role in the transition from fee-for-service models. In fact, the top barrier to value-based payments at an organization, according to nearly a third of respondents (32%), is when one of the involved parties does not have strong incentive to proceed. Lack of incentive may be due to internal factors such as leadership buy-in, resource constraints, or competing priorities. External factors such as the local competitive landscape, state policies, and market financial pressures also incent providers and payers to gravitate toward, or shy away from, value-based payments. To align incentives among payers and providers, we must change the dynamic so providers are rewarded for keeping a population healthy, rather than for inefficiently treating their ailments.

There are also opportunities to collaborate beyond risk-based payment arrangements. Payers and providers should continue to explore collaboration around improved quality, member/ patient experience, care coordination, and data and analytics. The bigger challenge is creating the burning platform to generate momentum and alignment around these goals.


What single change would most improve collaboration between payers and providers?

“Marriage counseling such that they don’t view each other as an enemy.”
— Clinician at a midsized nonprofit health system in the South

“Single payer.”
— Executive at a large nonprofit hospital in the Northeast

“Shared financial incentives for both parties.”
— Clinician at a midsized for-profit physician organization in the West

“Agreement on a common definition on value among providers, consumers and payors that takes into account collective and communal values and agreement on a values hierarchy.”
— VP of a large for-profit health system in the West

“Achieving the same goal! One side is about profit/algorithms that pertain to large groups while the other is about quality/medico-legal/cost considerations/one patient at a time. Still not convinced the metrics are truly capturing a real insight to what is actually being measured.”
— Clinician at a small for-profit clinic in the South

Download the full report for additional verbatim comments from Insights Council members.

Charts and Commentary

by NEJM Catalyst

We surveyed members of the NEJM Catalyst Insights Council, comprising health care executives, clinical leaders, and clinicians, about payer-provider integration. The survey covers alignment of payers and providers at respondents’ individual organizations as well as the health care industry overall; the degree of payer-provider alignment to achieve value-based care goals; stakeholders with the most influence to improve payer-provider collaboration; the most influential drivers to improve payer-provider collaboration; progress of sectors toward innovative, risk-based payment arrangements; the top barriers to implementing value-based payments at organizations; and the impact of single-payer health care on value-based care. A total of 607 completed surveys are included in the analysis.

How Aligned Are Payers and Providers in Working Together to Achieve Value-Based Care in These Particular Areas?

From the New Marketplace Insights Report: Payers and Providers Remain Far Apart. Click To Enlarge.

Download the full report to see the complete set of charts and commentary, data segmentation, the respondent profile, and survey methodology.

Download Full Report

Check NEJM Catalyst for monthly Insights Reports not only on the New Markplace, but also on Care Redesign, Patient Engagement, and Leadership.

Join the NEJM Catalyst Insights Council and contribute to the conversation about health care delivery transformation. Qualified members participate in brief monthly surveys.

New call for submissions ­to NEJM Catalyst

Now inviting longform articles


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »

More From New Marketplace
Shachar01_pullquote value-based care fee-for-service fraud and abuse laws

Are Fraud and Abuse Laws Stifling Value-Based Care?

To realize the true potential of value-based care, we must update the underlying assumptions in our fraud and abuse regulatory system.

Porter02_SBUs and IPUs pullquote1

What 21st Century Health Care Should Learn from 20th Century Business

Just as there is no such thing as good marketing or good manufacturing, there is no such thing as good primary care — it completely depends on how that care is tailored to meet the needs of patients with a particular medical condition.

Missouri Show Me Health Plans Cost Calculator for Health Insurance Enrollment screen shot - health insurance education

Facilitating Health Insurance Enrollment in an Uncertain Environment

Lessons learned from five years of open enrollment in Missouri.

Birkmeyer02_pullquote - national physician practices NPPs

Aggregators, Innovators, and the Resurgence of National Physician Practices

A perspective on the growth of NPPs and the ideological divide between for-profit and nonprofit providers.

Hospital-based ACOs Key Capabilities Are Different Based on Level of Risk

Hospital-based ACOs Face Challenges in Tracking Performance Indicators

A focus on bundled payments for specific episodes of care — versus the broad changes required in an ACO model — may be a more effective method for ACO participants to develop capabilities required to measure utilization, cost, and revenue metrics.

Medicaid Referral to Specialist by the Numbers without eConsults

Can eConsults Save Medicaid?

How eConsults unlock medical expertise for the underserved.

Transparency Can Improve Both Quality and Cost of Care

Survey Snapshot: Seeing Progress in Transparency, but the Quest for Value Continues

NEJM Catalyst Insights Council members agree that despite the challenges and caveats, transparency efforts are essential.

Growth in alternative payment models shared savings shared risk bundled payments population-based payments

The State of the Evidence on Payment Reform

Despite some successes among the many efforts to execute value-oriented payment models, the lack of rigorous independent research studies impedes robust progress.

University of Utah Health Buzz Survey Report Cost of Care and Physician Responsibility Out-of-Pocket Costs

Buzz Survey Report: Cost of Care and Physician Responsibility

An independent NEJM Catalyst report sponsored by University of Utah Health on how practicing clinicians and health care leaders view health care costs.

Donald Berwick Melinda Buntin Patrick Conway Raymond Vara Edward Prewitt head shots IHI forum panel on health care policy

Signal or Noise? Navigating Health Care Policy — Part 2

A discussion from the Institute for Healthcare Improvement National Forum. Part 2 of a two-part series.


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »


Value Based Care

181 Articles

Are Fraud and Abuse Laws Stifling…

To realize the true potential of value-based care, we must update the underlying assumptions in…

What 21st Century Health Care Should…

Just as there is no such thing as good marketing or good manufacturing, there is…

Disrupting the Health Care Landscape: New…

Traditional boundaries are disappearing in health care. Unlikely partners such as CVS Health–Aetna are teaming…

Insights Council

Have a voice. Join other health care leaders effecting change, shaping tomorrow.

Apply Now