“Payvider” — a portmanteau of “payer” and “provider” — commonly refers to healthcare organizations that have both care and insurance capabilities. Think: provider-sponsored health plans and payer-owned care delivery.
But the more you dive into the term, the more you realize it may not be very useful. If you think hard enough about it, many healthcare organizations could technically be payviders.
According to Blue Cross Blue Shield of Arizona, “payvider” emerged in the 1990s. However, the term took some time to gain traction. On a 2019 Innovaccer webinar, David Nash, MD, founding dean emeritus at Philadelphia-based Jefferson College of Population Health, said he first heard the term earlier that year. The physicians on the call weighed what the word may refer to, addressing risk arrangements, provider-owned plans and other forms of payer-provider collaboration.
“I’m not sure what the answer is at the moment,” Dr. Nash said. “It’s a relatively new term.”
The payvider concept predates the term itself, though. Founded in 1945, Oakland, Calif.-based Kaiser Permanente was built upon an integrated approach between its health plan and care. Bloomington, Minn.-based HealthPartners also has a longtime history of an integrated model.
Other notable health systems that embrace the payvider model include Pittsburgh-based UPMC, Salt Lake City-based Intermountain Health, and Danville, Pa.-based Geisinger, now part of the Kaiser Permanente family through Risant Health.
While some systems have recently backed away from their health plans, the popularity of value- versus volume-based models is a key factor driving the recent rise in payviders, according to a May JAMA letter. The percentage of U.S. hospitals owning or jointly owning a health plan increased from 18.3% in 2018 to 27.2% in 2023.
Beyond provider-sponsored plans, there are a few other ways the payvider phenomenon manifests. Despite criticism, large payers have been leaning into vertical integration through care-centric business divisions, which can include physicians, clinics and pharmacies. For example, UnitedHealth Group’s Optum has about 85,000 employed, contracted and affiliated physicians in its network. Cigna has Evernorth Health Services, CVS Health’s portfolio includes both Aetna and Oak Street Health, Elevance Health has Carelon, and Humana has CenterWell.
Murkiness regarding the definition of a provider only adds to the confusion. The Social Security Amendments of 1965 laid the groundwork, using the term to describe care institutions. The Social Security Act had a separate category for physicians, under “medical and other health services.” Medicare and Medicaid eventually covered more practitioners, such as physician assistants and clinical social workers. As the definition of a provider changes, so does the definition of a payvider.
You may be thinking: What about health systems that don’t have a health plan? These health systems are employers, and employers are among the country’s most influential payers. Even if they are working with an insurance company, self-funded employers assume financial risk. In essence, the payer label still applies.
Perhaps, the value of “payvider” may rest less in the term itself than in what it signals: a thinning line between payer and provider, and healthcare’s unfinished work in defining both.
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