Payer-Provider Tensions in Three Clichés

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The Big Story: Providers, insurers poised for ‘bloody’ negotiations amid inflation 

The often-tense relationship between providers and insurance companies is entering a new phase as both prepare to protect themselves in an economic downturn.  

“There will be more margin-versus-mission discussions. They [providers] would like to keep those mission-driven services going but they may not be able to afford it,” says one expert. 

“There is going to be a terrible bloody renewal cycle,” says another. 

“It’s kind of like sumo wrestlers in the ring,” says a third. 

What It Means for Healthcare Providers 

Our counsel in three clichés:

  1. “Buy your umbrella when the sun is shining.” You know the next negotiation is coming. Build your story and foster the relationships now that will protect you when the storm comes. Do the work now.
  2. “When elephants fight, it’s the grass that suffers.” Providers are not the heroes of a payer-provider struggle. You charge what for what? Neither are the payers. People don’t care about the giants when they fight. What matters to them is always the patient and their family and the care that enables them to live well.
  3. “Can’t we all get along?” Seriously. It doesn’t have to be this way. Whenever possible, be an advocate for a middle way.

Let’s look closer at how umbrellas, elephants and Rodney King’s famous quote apply to the tension in payer-provider relationships.

Always buy an umbrella when the sun is shining

This is the same relationship-building groundwork we’ve been advocating for a while. There’s a first-mover advantage here, and provider organizations should take it. Your conversations should be perpetual and not always tied to a specific negotiation. In fact, it’s a long-term play that should start well ahead of a negotiation, with an eye toward collecting – and disseminating – the information that will grease the skids when the moment comes. Questions you’ll want to ask:

  • Who are the stakeholders we’ll be talking to when things heat up? Brokers, employers and elected officials should all be on this list.
  • What kind of context do we want those stakeholders to bring to that conversation?
  • What do we want them to know about our organization?
  • What do we need to know about them, their needs and perspectives?
  • What topics will help better position us with them when it comes time for that talk?

When elephants fight, it’s the grass that suffers

But here’s the thing: Your mindset shouldn’t be to ask questions and build relationships so that people can help you – even though you do in fact need them. It’s easy to think that when you’re communicating with external audiences about a tough situation involving different camps, you’re trying to get someone to think you’re right and take your side. And then go to bat for you.

But that mindset is folly because it puts your organization at the center of the conversation.

What’s effective is putting your stakeholders to be at the center. You want them advocating for themselves.

To be honest, people probably won’t advocate for your organization if that’s the ask. Even if you convince them through op-eds and mailings that you’re right and the insurance company should accept your proposal, it might not be enough to compel them to act. But… they will advocate for what they want. If people feel a sense of agency and they know what might happen, they will pick up the phone and try to influence it for their own sake. This is true for individual patients and for employers – who are acting on behalf of their employees, your patients.

So, your story should center on the patients and delivering them the best care possible. Position your organization as the Obi Wan Kenobi to their Luke Skywalker. You’re the guide, not the hero. You’re a resource and ally, not a domineering voice. That means helping employers and patients answer a few of their own questions.

For employers:

  • What goals is <Provider Org> helping me achieve?
  • How is <Provider Org> helping me reduce healthcare costs?
  • How is <Provider Org> improving the lives of my employees?
  • What is <Provider Org> doing as a partner in our community?

In the end you want employers contacting the payer to say, “I need to have <Provider Org> in-network because they give me <key feature>.”

For patients:

  • How does <Provider Org> give me a good experience?
  • How is <Provider Org> helping me manage my health?
  • What do I need to do to keep seeing my doctor?

In the end, you want patients focused on the relationships they have – particularly that highly trusted one with their doctor – and fighting to preserve them.

Can’t we all get along?

We recognize the difficulty of this flip-the-script approach. Your energy and resources are marshaled around the goal of getting a fair contract. It’s hard to zoom out from that single-minded approach and dedicate the resources to long-term relationship building when there are so many daily fires to be fought. But as with so many things, the extra effort now should reap huge rewards next time you sit down at the long conference room table and go toe to toe with “The Other Side.”

Because in the long run, no one will win in this current setup with opposing sides. Certainly not the patients, but not payers or providers, either. Payers are becoming providers; providers are becoming payers. Forward-looking organizations are recognizing these increasingly blurred lines and developing strategies and building relationships to match.

With the perpetually looming uncertainty – plus a near-certain recession – everyone can spend their time fighting over bigger slices of a shrinking pie, or join and create something new. Mad Max, or When Harry Met Sally. Too cliché? Probably. But you get the point.

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.

Jarrard Inc.
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