Thinking Bigger

As a hospital, how do you feel about your relationship with your payers?

As a payer, how do you feel about your relationship with your providers?


Do you feel like your relationship – the good, the bad, the ugly – benefits your patients, your stakeholders, or the industry at large?

When I think of the current state of healthcare, I see a huge opportunity to change what has typically been an antagonistic relationship and reduce the exorbitant healthcare spending that plagues the industry: a 2014 Health Affairs study “found that administrative costs accounted for 25.3 percent of total US hospital expenditures—a percentage that is increasing…”[1] It’s not just one study; two other studies – one published in JAMA [2], one published by the National Institutes of Health [3] – find that around 8% of total costs in the healthcare industry are administrative in nature. With $3.6 trillion in projected costs for 2018 [4] and costs still on the rise, our current trajectory is simply not sustainable.

Reimbursement issues – denials, appeals, audits – contribute to this administrative burden, certainly, but there are plenty of other compounding factors to blame, including inefficiency within processes and the lack of productivity within current systems. We’re often adding people to deal with issues, without equipping them with the tools they need to succeed; the consultancy McKinsey finds that “job creation—not labor productivity gains—was responsible for most of the growth in the US healthcare delivery industry from 2001 to 2016. Innovation, changes in business practices, and the other variables that typically constitute MFP [multifactor productivity] harmed the industry’s growth. If the goal is to control healthcare spending growth, both trends must change.”[5]

With this in mind, I’ll circle back to my starting question: whether you work with a payer or provider, do you feel that your current relationship benefits you? Do you feel it benefits your patients or members?

The words often used to describe these relationships are telling: friction, abrasion, zero-sum game, tug of war. The natural reaction is often to double down, put fists in the air and rail against the other – whether that’s a payer or a provider. I understand that sentiment; the current status quo means that things simply don’t work smoothly and that each side rarely ends up satisfied.

But maybe you don’t think that the scorched earth tactics or an us-versus-them mentality works (after all, they haven’t yet): if you’re like me and feel like there is opportunity for a better system, what can be done? Or more appropriately, what can you do about it?

I’d like to invite you to a webinar I’ll be hosting at the end of April in which two of our health system partners – Covenant Health and Atrium Health – will be sharing how they’ve taken bold steps towards changing the industry. Their actions are much bigger than a single technology, they’re much bigger than a software tool, they’re much bigger than a few relationships: they comprise a new approach to smart utilization between – and for – payers and providers.

You may ask, what’s in it for the providers?

Hospital leaders are looking for the technology and tools that will allow their staff to work at top of license: McKinsey research finds that “that in the inpatient units at many hospitals, 36% of the tasks performed by registered nurses (RNs) could safely be performed by non-RN team members.” If they can find the technology that connects them directly to their payers, they can focus staff energy on managing patient care, not faxing, calling, emailing and the like. Providers are looking to align their technology and processes behind the clinical expertise they already have in their four walls while opening the lines of direct communication with their payers.

You may ask, what’s in it for the payers?

Payer leaders are looking to ensure they are disbursing only appropriate revenue, yes, but they are also looking to reduce the burden of denials and appeals, which place an administrative burden on their staff as well as complicate the experience of their members. As our network of collaborating payers and providers grows, the effects will reduce abrasion throughout the care continuum.

So, I’d just ask you to simply consider a few questions: do you want to take part of a movement that will benefit your organization? Do you want to better manage care for the lives you impact? Do you want a smarter approach to tackling the problems you face, and do you want the tools that you’ll need to succeed?

We’re experiencing a change that will fundamentally alter healthcare collaboration in the United States; it’s the end of us-versus-them and the beginning of something new. I look forward to hosting you.

– Heather Bassett, CMO at Xsolis