What's the biggest misconception about payers? 24 executives explain

What do people get wrong about payers? Financial incentives, prior authorization and the differences between types of payers are some of the biggest misconceptions, executives told Becker's. 

The executives featured in this article are all speaking at the Becker's Payer Issues Roundtable, which will take place Nov. 9-10 at the Swissotel in Chicago.

To learn more about this event, click here.

If you would like to join as a speaker, contact Randi Haseman at rhaseman@beckershealthcare.com.

As part of an ongoing series, Becker's is talking to healthcare leaders who will speak at our roundtable. The following are answers from our speakers at the event.

Question: What is the biggest misconception other parts of the healthcare system have about payers? 

Faris Ahmad, MD. Medical Director of Clinical Partnerships and Commercial PPO Reimbursement at Blue Cross Blue Shield of Michigan (Detroit): I think the biggest misconception that healthcare systems have towards payers is that payers prioritize financial considerations over everything else, including patient outcomes. That is simply not true. Payers today are prioritizing ensuring positive health outcomes for their members because a healthier member leads to fewer treatments and an overall better experience as they navigate the healthcare system. In fact, many payers have implemented value-based programs and initiatives to promote preventive care, chronic disease management and wellness programs to improve patient outcomes and reduce overall healthcare costs. 

Don Antonucci. President and CEO of Providence Health Plan (Portland, Ore.): Payers play a crucial role in promoting and facilitating access to quality healthcare services. At Providence Health Plan we focus on striking a balance between managing costs and ensuring the well-being of members, advocating for affordable care and collaborating with providers to improve health outcomes. We believe in health for all and ensuring that our communities have access to high-quality, affordable healthcare is our number one priority.

Paige Brogan. CalAIM Principal, Medi-Cal Procurement Office at Blue Shield of California Promise Health Plan (Oakland): There is a bit of a tug of war between payers and those receiving cost of care, and a misconception that payers are in the game for financial gain. The majority of people in the healthcare industry come to it with an ethos to improve the lives of each person who needs access to care. This includes all lines of business: commercial, Medicare, Medicaid, and individual family plans, such as those who have coverage on either the state or federally based marketplace.

Understanding the cost of care, transparency and an open conversation about health equity would be key for providers and payers to contribute to what matters most — affordable care that is accessible to all.

Neel Butala, MD. Assistant Professor of Medicine-Cardiology at the University of Colorado School of Medicine (Aurora); Chief Medical Officer of HiLabs: Payers' goal, above all else, is to help keep people healthy and ensure patients receive the care they need, but they are often wrongly perceived as just focused on cost containment or denying claims. As a physician on the frontlines, my interactions with payers oftentimes center around prior authorization and approval for care. However, through my work with AI solutions for payers, I have learned that this is only a small component of what payers do. If you look at where payers spend most of their time and energy, you find that it is spent on promoting the health of their members, health outcomes and coordinating care. They implement programs that encourage preventive care, population health management, and improving the quality of care. When you actually zoom out and look at the bigger picture, it becomes clear that keeping people healthy is their north star.

Yvonne Collins, MD. Chief Medical Officer at CountyCare (Chicago): There are many misconceptions the healthcare system has about payers.Often, it is thought that we are looking to deny services, delay care and delegate how providers take care of patients in the prior authorization process.These are not the goals at all. As a payer, it is our responsibility to ensure our members have the most optimal care in the most effective level of care. We want to make sure the drugs/surgery/services given are based on evidence, effective for treatment and safe. Where feasible, cost is included where there are equivalent products. When there is a provider concern, providers have the opportunity for peer-to-peer conversations to help a reviewer understand the request. We continuously look at the services that require prior authorization to see where changes can be made, and we have tried to automate the process for those who use the provider portal. Additionally, there are many services that do not require prior authorization. This process is an opportunity for providers to collaborate and partner with payers to improve the process.

Ceci Connolly. President and CEO at Alliance of Community Health Plans (Washington, D.C.): One of the biggest misconceptions is that health plans decide what services are covered for beneficiaries. Coverage decisions are made by the purchaser, namely the employer or a government agency contributing to the cost of coverage. Patients who are understandably frustrated about coverage and cost mistakenly believe it's the plan that decided that.

There's also enormous confusion about the different types of payers. A global, publicly traded conglomerate parent company is 180-degrees different from a small, local nonprofit health plan. Similarly, we at ACHP believe that plans that are provider-aligned, often as part of an integrated system, are uniquely suited to delivering superior, coordinated coverage and care. Their financial incentives and health goals are in sync, and that makes a difference.

Onyinyechi Daniel, PhD. Vice President of Data and Analytics Strategy at Highmark Health (Pittsburgh): One of the biggest misconceptions other parts of the healthcare system have about payers is that there's an inevitable misalignment of objectives and goals related to desired outcomes for patients and members, and the implications for margins and revenue. Increasingly, collaboration across providers and payers to enhance patient/member outcomes enables more seamless digital experiences for members and patients, increased personalization, and reduction of administrative waste.

Interoperability of data is a crucial step for helping payers and other parts of the healthcare industry bridge critical gaps and develop new ways to innovate valuable healthcare solutions. The truth is that we are all working together to enable our members and patients to achieve their best health, and I'm optimistic about how the healthcare system — payers, providers, strategic partners — rally around that objective.

Lisa Davis. Executive Vice President and CIO of Blue Shield of California (Oakland): Payers are committed to promoting preventive care in a strategic, proactive way. The reality is that payers are well-positioned to connect members' holistic health data to ensure that every touchpoint across the healthcare ecosystem has the full picture of their health. The technology that makes this possible also gives us the ability to predict and recommend care interventions earlier using analytics to surface and communicate care gaps to members through personalized, targeted messaging.  

Mac Davis. Vice President, Digital Product and Data of Belong Health (Philadelphia): [A misconception is that] payers are only there to pay the bills. Payers have more to offer than richer contracts and financial administration. It's extremely important that payers support providers by bringing robust care management, social care, and other services outside the four walls of a clinic to make providers more effective, especially for more complex populations like dual-eligible

Payers bring a broad view of a member's care across care locations, and both parties see the best results when this data is married with deep local provider knowledge. But this isn't easy.

Providers talk about "my patients" and payers "my members." Whether referring to their "patients" or their "members," provider/payer terminology differences are emblematic of the unique perspectives each brings to the table to the benefit of an individual. When providers and payers are tightly aligned we are stronger and more efficient, but that alignment requires both parties to have the executional ability to inspire trust and the willingness to invest time in developing relationships. Only when these conditions are met can we move beyond our individual roles and focus on the needs of our joint stakeholders — humans who need care. 

Tenbit Emiru, MD, PhD. Executive Vice President and Chief Medical Officer of UCare (Minneapolis): A common misconception voiced by my former provider colleagues is the expectation that fees for Medicaid and Medicare services can be negotiated the same as for commercial services. Government program health plans are subject to a whole different set of regulated rules. Each state sets a fee schedule for Medicaid services that determines the rates paid to providers. CMS sets fee schedules for Medicare plans to follow. While we are compliant about paying government-mandated rates, we are able to engage in value-based arrangements that recognize providers for improved health outcomes of our members — especially higher risk members who use more health services. As a nonprofit health plan that primarily serves Medicaid and Medicare members, the rates are set for us by the state or federal government, and we prioritize serving our members by being good stewards of those government dollars.

Robert Groves, MD. Chief Medical Officer of Banner|Aetna (Phoenix): The biggest misconception about payers is that they are primarily responsible for the high cost of care, and that the only reason care is denied is because of cost. The truth is there are many causes, and therefore potential solutions are very complex. When the Office of Management and Budget looked at healthcare costs and predicted strategies most likely to curb them, they barely mention insurance companies. They see insurance as basically a pass-through that transfers the high and ever-rising industry prices from delivery systems to consumers. 

There are certainly plenty of misaligned incentives, incidences of gamesmanship, and a trove of middlemen that maintain the status quo, but the insurance companies that I know want high-quality care at an accessible price. There is no single evil entity responsible for the high cost of health care. It's the combination of opaque healthcare markets, service and data fragmentation, regulatory design and profit incentives that drive collective behavior. Attempts to slow price growth have seen only marginal and often temporary success. While I agree a pre-payment system with a sharp eye on quality makes the most sense, we have other problems that may limit the gains of capitated models. My perspective continues to evolve as I learn.

Mike Hill. CEO of Total Control Health Plans (Holland, Mich.): I believe the biggest misconception other parts of the healthcare system have about payers is that all payers are created equal. The entire reimbursement model for healthcare is broken, bureaucratic, and truly only benefits commercial payers. Self-funded employers, on the other hand, want the same thing that healthcare providers want: to get their employees as healthy as possible, as quickly as possible. Many self-funded employers have built plans that will reward high-quality providers. However, these providers need to understand that isn't the same adversarial relationship they are accustomed to from commercial payers; rather, employers are seeking a true partnership. 

Dennis Hillen. Senior Vice President and Market Leader of Oscar Health (New York City): The biggest misconception is that payers are not working to streamline the healthcare experience. Navigating healthcare can be complex and cumbersome, and payers have the responsibility and privilege to serve as connective tissue within an otherwise fragmented system. 

At Oscar, we've built a consumer-centric technology platform and have invested in cultivating engagement opportunities to support our members on their unique healthcare journeys. By combining the power of our technology and concierge team, we can route members to the best providers for their specific needs, providing insight into quality and cost in an otherwise opaque marketplace. 

We're on the side of our members and believe it's our role, as a payer, to provide them with the best possible experience. We arm our members with more confidence and information about their choices at a time when they can be most vulnerable, so they can enjoy the freedoms that come from saving money and becoming healthier.

Cynthia Hundorfean. Chief Living Health Development Officer of Highmark Health (Pittsburgh): There is often the misconception that payers don't consider health delivery systems when developing their business models. The payers who will be most successful in transforming the industry are those who are in lock-step with provider systems. No one can transform healthcare alone, but providers must be actively involved to test, learn and deploy new solutions that will improve the patient and member experience.

Hilary Marden-Resnik. President and CEO of UCare (Minneapolis): As large, national for-profit health plans dominate the payer landscape in some markets, a common misconception is that all payers are driven primarily to make a profit so they can meet shareholders' financial expectations. This is not the case. Nonprofit, community-based health plans like UCare are primarily driven to improve health outcomes and reduce health disparities, and to reinvest our earnings for the benefit of members and the communities we serve. Through our foundation and end-of-year giving, we also fund provider initiatives that address social risk factors and the holistic health of patients — especially in underserved and low-income communities. We consider our "shareholders" to be the members and the communities we serve.

Krystal Revai, MD. Associate Chief Medical Officer of Health Alliance (Champaign, Ill.): One of the biggest misconceptions other parts of the healthcare system have about payers is that the way payers "save" money is by denying care. Actually, the way payers look for savings is by finding ways to invest in members through preventive care. Spending money on preventive programs, care management and supplemental benefits is the primary way health plans address cost.

Anil Singh, MD. Senior Vice President and Executive Medical Director, Population and Curated Health of Highmark Health (Pittsburgh): I think the biggest misconception is that healthcare systems misinterpret that the payers only care about economics. As a payer, we care about the health and health outcomes of our members. Improving health outcomes leads to a reduction in costs, which allows payers to reinvest in their members.

Jack Shoemaker. Business Operations Delivery Lead at Medical Home Network (Chicago): The monthly premiums that fund the payments to those providing healthcare to the beneficiaries come with many strings attached by the sponsors — both private and public. Payers must do the bidding of these sponsors. Those stipulations are a many-headed hydra including cost, quality and access dimensions. The policies and procedures that emerge are reflection of these multifaceted challenges.

Johanna Vidal-Phalen, MD. Chief Medical Officer, Quality of UPMC Insurance Services Division (Pittsburgh); Clinical Assistant Professor of Pediatrics at the University of Pittsburgh School of Medicine: Prior to joining a payer team, when I worked primarily as a clinician, I had many misconceptions about payers, including the notion that they are focused only on the bottom line and not the positive health outcomes of patients. When I began working in a leadership role for a payer, I developed a better understanding of the many member- and provider-facing initiatives payers develop and support as part of their day-to-day activities. Perhaps the most impactful of such initiatives are the programs UPMC Health Plan is leading to address social determinants of health. From the UPMC Health Plan Neighborhood Center, which provides a food pantry, workforce development programs, social services, and virtual health care services, to Freedom House 2.0, a training program for first responders in underserved communities, UPMC Health Plan is a payer committed to addressing the needs of the community it serves. With clinical programs focused on serving the needs of members with complex medical conditions and our award-winning member services team, our health plan is focused on providing the best customer service experience to our members.

Another misconception that providers may have is that strategic and operational decisions can be made without clinician input. The reality is that many experienced practitioners, who are still actively working in clinical practice, are important stakeholders in our medical policy committee and our quality physician advisory council. Our organization actively engages with medical directors, who participate in the day-to-day operations of the company and bring a wealth of knowledge from their numerous clinical specialties. As part of an integrated delivery and finance system, UPMC Health Plan remains current with the latest clinical developments, thanks to close provider partnerships that help inform our decisions.

David Webster, MD. Chief Clinical and Provider Strategy Officer at Medica (Minnetonka, Minn.): The biggest misconception is that health plans and health systems must be adversarial or transactional rather than potentially being long-term partners working together on behalf of the local community, members and patients. At Medica, health system partnerships are core to our strategy. Through collaboration with health system partners, we improve the quality and affordability of care.

Some specific ways that health plans can be great partners with health systems:

  • Sharing data. The sharing of actionable data can facilitate improved quality and outcomes. Utilization of data assists with managing costs.
  • Care delivery collaboration. Seamless care management collaboration improves both the member experience and the coordination and efficiency of care. Examples include developing care plans together, coordinating care across settings and facilitating preventive care. 
  • Promoting quality improvement. Health plans and health systems can improve quality and spur innovation by identifying and implementing best practices.

A true partnership benefits members and patients, improving outcomes, reducing costs and increasing satisfaction.

Chanin Wendling. Senior Director of Clinical Operations at Contigo Health (Charlotte, N.C.): "Payers" is not a one-size fits all term. Employers who run their own self-funded health plans are disrupting the traditional carrier market, diving headfirst into the healthcare system to demand solutions that improve employee outcomes and reduce costs. This includes many employers, not just firms like Walmart and Amazon. Efforts include standing up their own healthcare clinics, partnering with health systems on centers of excellence solutions where they travel their employees to receive the best care, and working with health systems and partners in geographies where they have concentrated groups of employees to address variations in care to improve quality. Employers are no longer sitting on the sidelines waiting for traditional healthcare players to address the many challenges with our healthcare system.

Howard Weiss. Vice President of Public Policy and Government Engagement of EmblemHealth (New York City): There is the perception that the current healthcare system is heavily fragmented, resulting in a difficult path for members and patients to navigate. Greater collaboration between stakeholders in the healthcare field is vital to creating better solutions for the individuals we serve. When health plans, healthcare providers, pharmaceutical companies, and others work together, we change this perception and move closer to a system that prioritizes affordable, high-quality and preventive care. One of the ways EmblemHealth aims to achieve this is by working constructively to create more uniformity in administrative processes and utilization management programs that are clinical- and consensus-based. Collaborating with the major stakeholders is the most effective way to meet the needs of the individuals we serve.

Darren Wethers, MD. Chief Medical Officer of Atrio Health Plans (Salem, Ore.): I think many providers believe that the payers are capricious and arbitrary in performing authorization reviews. All payers utilize criteria in reaching authorization determinations: some are proprietary to the company; most are national criteria sets such as InterQual or Milliman Care Guidelines. For Medicare Advantage we follow a hierarchy of CMS national coverage determinations, local coverage determinations, national criteria sets (including NCCN for oncology care), and local plan coverage rules before finally defaulting to medical director medical judgment if no guidance is found in the other sources. It would be helpful for providers to familiarize themselves with the coverage rules for the care they most commonly request authorization for in order to craft auth requests more likely to meet approval, and to do so for the plans that they most commonly do business with.

Cameual Wright, MD. Vice President and Market Chief Medical Officer of CareSource Indiana (Dayton, Ohio): As a physician, I am acutely aware of the negative perception healthcare providers frequently have of payers. There is a persistent misconception that we are financially motivated and only interested in the bottom line. I believe there is an opportunity to remedy the fractured relationship between payers and providers by aligning incentives through value-based agreements, collaborating on quality and community-focused initiative and increasing awareness of the myriad of programs and incentives we offer to support the health and well-being of our members.

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