‘Payvider’ Model Is a New Trend for Care Coordination and Addressing Social Needs
By Melinda Young
Case management and care coordination often are seen as ways to improve patient care outcomes, reduce readmissions, and make hospital-to-community care more efficient. However, resources remain limited in care coordination efforts because of the payment disincentive.1,2
“The biggest challenge is the payment system in the fee-for-service world, where care coordination is an expense rather than viewed as part of the total picture for improving health,” says David B. Nash, MD, MBA, a founding dean emeritus of the Dr. Raymond C. and Doris N. Grandon professor of health policy at Thomas Jefferson University in Philadelphia. “In a capitated, value-based world, care coordination is essential to improving health. As long as we are focused on fee for service, care coordination will never have a complete seat at the table.”
A solution that is gaining steam is the “payvider” model. This model can involve health systems owning a health insurance plan for people who are necessarily connected to the health system, such as self-insured employer health plans that only cover staff and their families.
Owning both a health insurance plan and healthcare facilities has become more attractive to health systems since the value-based care model emerged in the 2010s, says John Squeo, MBA, FACHE, CHCIO, provider market business head at CitiusTech, a healthcare information technology organization in Chicago.
“The plan infrastructure started looking attractive to health systems to drive those cost models,” Squeo explains. “There’s a vested interest for health systems to drive patients to their own plan, where they could have tighter care integration. The market is going away from fee for service — wholly owned payvider plans will offer value-based care, and they could drive much better value.”
The payvider model involves partnerships, contracts, joint ventures, or ownership models. More healthcare systems are moving in that direction.
The Affordable Care Act (ACA) created a boost for preventive measures and created accountable care organizations (ACOs) that have helped improve health and care coordination. But its promotion of care coordination is modest because the United States remains in a fee-for-service environment, Nash explains.
“In delivery systems focused on the whole person and prevention and improving health, case management or care management are front and center,” Nash says. “In those systems that focus on fee for service, care management takes a back seat.”
Hospitals have responded to federal penalties when they have readmissions or long lengths of stay. But their efforts to enhance care coordination are modest. “Hospitals have responded to penalties and tried to streamline operations,” Nash says. “Twenty years ago, I had my first spinal fusion and was in the hospital for four nights. When I had the same surgery seven weeks ago, I stayed in the hospital for two nights.”
A shorter length of stay is better for patients because it reduces the risk of hospital-acquired infection. Nash’s clinical outcome was great, but he was disappointed in how care managers from his payer handled the follow-up calls.
“There were three separate phone calls from well-meaning care managers, none of them knew the other person had called me, and each of them tried to take a separate history,” Nash says. “It was a pathetic situation, where they were essentially checking a box. I called them out on it.”
Optimal care coordination would have patients’ histories on computer screens, and there would be no overlap of outreach and tasks. But this requires more attention and resources than what sometimes occurs in fee-for-service cases.
“If you pay for piecework, you get piecework. If you pay for care coordination, you get care coordination,” Nash says. “It’s that simple.”
As Nash’s experience shows, robust case management is not the same as patient-centered case management. Payers often have robust case management that is redundant to what the hospital case management team is doing.
“They may trade notes, but it’s redundant. They cross wires and have low levels of integration,” Squeo explains. “With a payvider plan owned by the hospital, there are a couple of different opportunities.”
One opportunity is employing case managers who can work across organizations and reduce redundancies, such as several people calling the same patient and asking the same questions.
“It’s less wasteful,” Squeo says. “There could be really good information alignment.”
The payvider model aligns economic incentives and facilitates value-based care. “The rise of payvider is a critical thing because it’s a recent trend, and it’s long overdue to help align economic incentives,” Nash says.
Relying on value-based payment as a model or term is no longer meaningful. “The term has lost all meaning,” Nash says. “It’s all about what we are doing to improve health and how we design a system that has the core and critical goal of improving health.”
If the nation was starting all over, it would not create a fee-for-service system. It would design a system that includes measures to improve health and guide it in the direction of improving care quality, Nash says. “The system we have is not improving health. The life expectancy in the U.S. is going in the wrong direction. There is obesity, hypertension — going in the wrong direction,” he asserts. “We need a complete reorientation.”
The traditional inpatient model to fill beds with patients is under duress as fixed costs rise and reimbursement falls, Nash says. “The traditional hospital model is probably not sustainable, and all the big providers know this. They’re trying to do everything in their power to be more efficient, to achieve economies of scale, and to reduce waste,” he adds. “But the core model is broken, and volume is not going to rescue hospitals.”
This is why health systems have moved toward new markets, such as buying nursing homes, investing in companies, and promoting home care. “They’re doing everything they can to find other sources of revenue,” Nash explains. “We believe the way out of this jam is to look at this merging payvider model that creates an opportunity for payers and providers to work together.”
When providers work with payers, they can align economic incentives and ensure people do not visit the ED for primary care, for instance.
The payvider model creates more opportunities for case management and care coordination, and it is aligned with population health goals. Population health, which Nash helped initiate with a population health college in 2009, has become a national movement since it was boosted by the ACA.
“Population health popularized the idea that the social determinants drive 80% of health outcomes,” Nash says.
For case managers, the advantage of a payvider model is that they can more easily build trust with patients because they will have access to the patient’s health information across providers. While a health system has data from a patient visit, the payer will have data from all healthcare organizations that interacted with the patient — including pharmacies, outside provider offices, and others.
The trust factor improves when a case manager can call a patient and say they are calling them on behalf of the patient’s primary care provider, Squeo notes. In a payvider model, the primary care provider and case managers at the payer end are working in concert without the silos that make a patient feel as if no one fully understands their case.
“The goal of the payvider model is to never treat that person as a stranger,” Squeo says. “What we do is pull in information from every source possible and create a single screen.”
Case managers and providers can see every recent piece of information about the patient. This helps them personalize their interactions with the patient.
“Personalization based on trust really drives that integration of care,” Squeo says.
- Nash DB. The future of chronic disease management. Popul Health Manag 2023;26:S2-S3.
- Goldberg ZN, Nash DB. The payvider: An evolving model. Popul Health Manag 2021;24:528-530.
Case management and care coordination often are seen as ways to improve patient care outcomes, reduce readmissions, and make hospital-to-community care more efficient. However, resources remain limited in care coordination efforts because of the payment disincentive. A solution that is gaining steam is the “payvider” model.
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