Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Amazon gives out $12M under next phase of AWS diagnostics development initiative
      LifePoint Health and Prisma Health end acquisition deal
      More women than men are getting vaccines
      China admits its vaccines aren't very good
    • Amazon gives out $12M under next phase of AWS diagnostics development initiative
      More women than men are getting vaccines
      China admits its vaccines aren't very good
      Lawmakers seek long-term limit on governors' emergency power
    • Calls mount for Biden to track U.S. healthcare worker deaths from COVID
      Front-line workers want more assistance after a year of COVID-19
      Healthcare providers enter Philadelphia's legal fight to enact gun laws
      Taking population health expertise to the market
    • Cigna and Oscar expand their small business partnership
      5 things to know about Agilon Health's proposed IPO
      More than a half million Americans gain coverage under Biden
      Insurance auto-retention policies could halve number of people kicked off coverage
    • Lawmakers seek long-term limit on governors' emergency power
      Reforms follow deadly year in New York nursing homes
      MACPAC approves recommendations on specialty drugs, behavioral health
      No region in the world spared as virus cases, deaths surge
    • Outgoing UHS chief made almost 50% less in 2020 than 2019
      A hundred dollar bill cut into strips with a colorful background.
      Population health still at odds with fee-for-service
      Private equity could increase long-term Medicare spending, MedPAC says
      Jeb Bush, Marilyn Tavenner getting in on healthcare SPAC frenzy
    • Healthcare data breaches
      By the Numbers: National health information service providers
      Health systems are navigating the digital divide and vaccine access
      woman doctor shaking hands with nurse and smiling
      Sponsored Content Provided By Philips
      A stronger healthcare system requires bold new ways of working together
    • More women than men are getting vaccines
      More Black Americans open to vaccines after outreach efforts
      Fight against STDs lost amid coronavirus testing blitz
      Beyond the Byline: Kids' unchecked mental health needs pose long-term consequences
    • Novant Health adds chief payor performance officer
      Kaiser Permanente names Comer chief IT officer
      Mass General Hospital's Slavin to retire as CEO
      UnitedHealthcare names Thompson as new CEO
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • A close-up of a woman receiving a COVID-19 vaccine.
      Providers in underserved communities work toward equitable vaccine distribution
      Josh Bradshaw
      How one rural Illinois county vaccinated 84% of its senior citizens by early March
      Dr. John Fischer
      Patient-reported outcomes tool for hernia surgery helps physicians improve care
      New care model helps primary-care practices treat obesity
    • A family photo of the the Hangens.
      Stressing the already burdened pediatric behavioral health system
      Jennifer Pannone and her daughter Victoria.
      Mental health access for children needs attention
      What's next for on-demand telehealth companies?
      A CalOptima PACE vaccination clinic.
      Will COVID-19 be the catalyst for creating a more sustainable healthcare system?
    • Ryan McGinnis
      Finding efficiencies in the OR using tech
      Dr. Daniel Hall
      UPMC pilots machine learning, telehealth to inform patient transfers
      A woman being recorded using her inhaler on a smartphone.
      Digital check-ins, connected inhalers help control asthma
      A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Diabetes patients at high risk from COVID-19 are managing conditions more effectively
      Nearly 1 in 5 Americans skipped care due to cost last year
      COVID-19 long-haulers need holistic treatment, providers say
      Amazon expanding employee clinics into two more states
    • Amazon gives out $12M under next phase of AWS diagnostics development initiative
      Malpractice premiums peak in 2020, AMA survey shows
      A rendering of a cancer research institute at the University of Southern California that will include 5G.
      Healthcare providers determine how to best use ultrafast 5G
      Two-thirds of largest hospitals aren't complying with price transparency rule
    • Addressing long-standing barriers needed for mental and physical health integration
      A close-up of a woman receiving a COVID-19 vaccine.
      Providers in underserved communities work toward equitable vaccine distribution
      The waiting room of a Kaiser Permanente clinic at a Target location.
      Health systems revamp their approach to retail clinics
      Josh Bradshaw
      How one rural Illinois county vaccinated 84% of its senior citizens by early March
    • CMS wants to bump pay for hospices, SNFs next year
      CMMI pauses new Direct Contracting model applications
      CMS wants to boost payments over 2% for inpatient rehab, psych facilities
      40 Oregon providers, insurers sign value-based care pact
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Dr. Alan Kaplan
      The risks, rewards of taking organizations 'where they haven’t gone before'
      Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
    • Drs. Hal Paz and Joshua J. Joseph
      Mobilized to fight the COVID crisis: a blueprint for community and academic partnerships
      Dr. Stephen Markovich
      Making sure we're aligned along the path to achieving inclusion
      Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
    • We're losing engaged providers, and healthcare will pay the price
      Bonnie Castillo and John Welton
      Dueling opinions: The role of mandated nurse staffing ratios
      Dr. Chris DeRienzo
      How COVID-19 broke health systems and made them stronger
      Still crossing the quality chasm: a look at the IOM's seminal report 20 years later
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Voting Open - 50 Most Influential Clinical Executives
      Nominations Open - Top 25 Innovators
      Nominations Open May 24 - Top 25 Emerging Leaders
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Minorities in Healthcare
      • - Luminaries
      • - Top 25 Minority Leaders
      • - Minorities to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • emburse certify modern healthcare custom media webinar logo lockup
      Sponsored Content Provided By Emburse
      Webinar: Making it easy to manage costs
      virtualmed staff modern healthcare custom media logo lockup
      Sponsored Content Provided By VirtualMed Staff
      Webinar: Best practices for creating a successful telepsychiatry program
      telehealth visit man touching neck while speaking to doctor on computer
      Sponsored Content Provided By Accumen
      Webinar: How telehealth has evolved into a standard of care
      modern healthcare custom media and trimedx custom webinar logo lockup
      Sponsored Content Provided By TRIMEDX
      Webinar: Bridging the gap between clinicians and administration to improve capital equipment planning
    • Women Leaders in Healthcare Conference
    • Social Determinants of Health Symposium
    • Healthcare Transformation Summit
    • Leadership Symposium
    • Virtual Briefings
      • - Hospital of the Future
      • - Mental Health
      • - Patient Safety & Quality
      • - Strategic Marketing
      • - Virtual Health
      • - Workplace of the Future
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Dr. Chris DeRienzo
      Next Up Podcast: Building team spirit in the wake of COVID-19
      Mikelle Moore
      Next Up Podcast: Mikelle Moore on recognizing all hospital workers during the pandemic
      Empty boardroom
      Next Up Podcast: What's going to happen tomorrow? Succession planning during emergencies
      Next Up Podcast: Educating patients on the COVID-19 vaccine with Tanya Andreadis
    • Beyond the Byline: Kids' unchecked mental health needs pose long-term consequences
      Beyond the Byline: How COVID-19 has impacted hospital finances
      An older man sitting on a hospital bed with his back toward the camera.
      Beyond the Byline: Upcoding could explain why hospitals are increasingly billing for the most complex treatment
      Beyond the Byline: Insurers are betting on virtual-first plans as COVID-19 shifts care pathways
    • James garvert neustar healthcare insider podcast image
      Building on basics
      Healthcare Insider Podcast Episode Art - Premier
      Why Roger Weems and other consultants are leaving the big firms to join Premier
      James garvert neustar healthcare insider podcast image
      Outreach during COVID-19
      ann barnes healthcare insider podcast image
      Leading with intention to promote diversity and inclusion
    • The Check Up: Matt Eyles
      The Check Up: Matt Eyles of AHIP
      The Check Up: Dr. Tom Shanley
      The Check Up: Dr. Tom Shanley of Lurie Children’s Hospital of Chicago
      The Check Up: Dr. Harold Paz
      The Check Up: Dr. Harold Paz of Wexner Medical Center at Ohio State University
      The Check Up: Pat Schou
      The Check Up: Pat Schou of the Illinois Critical Access Hospital Network
    • ivana naeymi-rad one on one intelligent medical objects
      Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Opinion & Editorial
Sponsored Content Provided By Optum
This content was created by and paid for by an advertiser. The Crain's editorial department was not involved in the creation of this content.
March 05, 2019 12:10 PM

Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together

  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Optum stock image March 2019

    Health care is at a stalemate. Providers can't charge higher rates. Payers can't increase premiums. Employers can't shift more risk to employees. Nobody can afford a higher cost.

    To uncover value and grow business, stakeholders must start to chip away at the total cost of care. One big piece of overall cost is administrative waste — estimated at $200 billion a year in the U.S.1

    On their own, providers and payers haven't been able to drive down administrative costs. The way forward is through collaboration in every phase of the payment process.

    Dr. Mitch Morris, executive vice president at Optum, answers six questions on finding areas of alignment and the potential benefits of collaboration.

    1. How can payers and providers work together to reduce administrative costs? 
      To begin collaborative work, payers and providers should define common goals, a common vision and common rewards. Agreement on risk tolerance and change management strategies is also a key component.

      A shared goal might be happy customers, measured through patient satisfaction surveys or Net Promoter Scores (NPS). Another might be business growth, accomplished through financial success and attracting more patients and members.

      Payers and providers can use enabling technology, workflow tools and analytics that drive good decision-making to share information. Each should be comfortable with what the other is doing.
       
    2. What could be the biggest impact of greater payer-provider collaboration?
      I would say the potential to eliminate denials. As an industry, most systems are set up with significant infrastructure to deny and fight for authorizations. The patient (the consumer) gets caught in the middle. It delays care. It adds cost.

      We can get there by moving the focus of administrative work from post-service to pre-service or at service, and by sharing automated rules and data. It will take strategic relationships and open communication to determine financial responsibility and prior authorization at the point of care.

      This level of transparency should increase patient satisfaction. It helps reduce conflict between what the physician prescribes and what the payer covers.
       
    3. Why is prior authorization a concern?
      Health care is one of the only industries where consumers buy something without knowing how much it is. It's typically not until a patient receives their bill that they know the real cost.

      Let's say a physician enters a prescription or orders a test in the electronic health record. Wouldn't it be great if the system interacted with the claims system and indicated whether the procedure is authorized right then and there?

      We've been working at Optum on that type of an approach to prior authorization. For example, if a physician ordered an MRI for back pain, clinical and claims systems would communicate directly. If the criteria were fulfilled for doing an MRI, then the authorization number would be generated.

      But what if the case doesn't fulfill the evidence-based criteria? For example, the patient has experienced the pain for less than three months or hasn't tried to address the issue with anti-inflammatory meds. The system would alert the provider who can then add additional documentation or choose another care path.

      The provider doesn't order an MRI only to have it denied. The payer isn't wasting time denying claims or defending those denials. The patient isn't left waiting for a resolution. The whole process is much more transparent and simplified.

      Doctors and nurses are able to make informed decisions — the first time at the point of care — and insurance companies pay right away because they have confidence in the process. That means you're able to reduce administrative costs. And when patients understand the cost of services ordered, they are empowered to ask about other available care options.

      We're getting ready to pilot this approach in clinical practices. We're excited about the impact on cost, quality of care, satisfaction and engagement among providers and their patients.
       
    4. How will a transition to value-based care encourage more collaboration?
      In areas of the country that have made a switch to value-based care, you see more extensive collaboration between payers and providers. They're using good integration technologies. It's no longer about documenting things in the same way. It's more about documenting quality and outcomes.

      This kind of collaboration represents a shift away from strategies developed under traditional fee-for-service models. Stakeholders are progressively moving to value-based care. Working in partnership offers opportunities to remove friction and complexity from revenue cycle management and payment integrity.

      As providers begin to take on financial risk — and accountable care organizations are one of the first steps in that process — it opens the door to greater financial alignment. Then payers can comfortably delegate authority to providers to authorize care because they trust the process and because their incentives match.
       
    5. How might payers and providers benefit from strategic partnerships aimed at modernizing the payment continuum?
      Payers can likely look forward to a reduced risk of claims overpayment and lower costs for payment integrity. They may also improve provider contract rates and influence utilization.

      For providers, a more coordinated approach holds the promise of accelerated payments, reduced denials and write-offs, and clarity on payment rules and regulations.

      Both groups may improve patient satisfaction and engagement. Patients may enjoy fewer delays in care and more transparency about coverage and financial responsibility.
       
    6. Why should payers and providers tackle total cost of care together?
      There's little more any single group can do on its own to tackle the problem of administrative waste. It's really going to take alignment between different business interests. It means figuring out how the health care industry is going to solve this problem.

      With a set of leaders who are determined and have a shared vision, payers and providers can team up and partner with companies that support their collaboration. This strategy can help participants better leverage capital investments. It can help them enable technologies that link payment systems and clinical systems. This will include embedded alerts and reminders that help doctors and nurses make informed decisions. It allows for shared risk.
       

    Companies like Optum can facilitate these changes, with technology, managed services, change management and people who can work in local markets with payers and providers. Strategies could include financial incentive changes around forming risk-bearing entities, managed services to lower total cost, or finding the right partners.

    Shared pain points are at the heart of the opportunities for collaboration. Learn more about payment pain points felt by both payers and providers. Discover how collaboration can address each pain point. Explore the Optum Payment Nexus interactive infographic.

    © 2019 Optum, Inc. All rights reserved.



    Footnotes
    1. Institute of Medicine of the National Academies. The Best Care at Lower Cost: The Path to Continuously Learning Health Care in America. Washington, DC: National Academies Press; 2013. www.ncbi.nlm.nih.gov/books/NBK207218/.
    About the Author:

    Mitchell Morris, MD, is executive vice president of Optum. Dr. Morris brings 30 years' experience in health reform, technology, innovation and growth to health systems, academic organizations and government agencies. Prior to joining Optum, Dr. Morris held leadership roles at MD Anderson Cancer Center and Deloitte LLP.


    Sponsored By:


    optum logo

    Sponsored Content
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Minorities in Healthcare
          • - Luminaries
          • - Top 25 Minority Leaders
          • - Minorities to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Women Leaders in Healthcare Conference
        • Social Determinants of Health Symposium
        • Healthcare Transformation Summit
        • Leadership Symposium
        • Virtual Briefings
          • - Hospital of the Future
          • - Mental Health
          • - Patient Safety & Quality
          • - Strategic Marketing
          • - Virtual Health
          • - Workplace of the Future
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing