Employers buying healthcare have a different perception of value than those providing the medical services.
In truth, the "healthcare transaction" is all about value, the relationship between the money paid and the quality received. But value is in the eye of the beholder. What is superb, tolerable or unacceptable for one person might be a far cry from the next guy's valuation. Despite the varying standards, maximizing value is a nifty economic achievement.
The process is smoother if the buyer and the seller are on the same page when it comes to defining and measuring value. Two surveys by Watson Wyatt Worldwide suggest an alarming gap between healthcare providers and some of their key customers on the concept of value.
The consulting firm teamed with the Washington Business Group on Health to survey 527 companies, 70% of which employ more than 1,000 workers. Watson also polled 1,286 members of the Healthcare Financial Management Association about delivering value. The results signal the need for improved communication between the two sides.
Most telling is that while one-third of employers view providers as partners, only 10% of the providers feel the same about employers. In addition, 18% of the employers said they have an uneasy truce or adversarial relationship with providers, while 33% of the providers harbor those negative feelings about employers.
Providers must face the fact that employers are getting more involved in medical decisionmaking. The typical evolution is a company joins a purchasing coalition, gets interested in evaluating providers and then tinkers with direct contracting.
Meaningful relationships depend on trust. Employers want value and high quality from providers in hopes of maintaining a healthy, productive work force. Providers focusing on those needs stand the best chance of building a stable patient base and enjoying long-term relationships with employers.
While providers are correct to concentrate on improving the delivery of care, they should remember that employers want to expand the concept of value to include enhancements in quality of life, productivity and the overall health of their employees.