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.

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.

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.

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