In America, chronic kidney disease affects over 37 million people, with more than 750,000 patients having end-stage renal disease (ESRD). It is estimated that $144 billion, or 1 in every 5 dollars in Medicare, is spent annually on kidney disease patients, with anticipated increases.
Healthcare payers and providers play two distinct roles in the healthcare system while being interlinked. This relationship can be leveraged to make up a crucial part of value-based care model frameworks.
Key Points
- Healthcare payers and providers deliver different services in patient care.
- Providers focus more on measures of application and capacity of the service they offer.
- Payers provide coverage for “people” and are concerned with revenues per enrollee and medical loss ratios.
- The role of healthcare providers and payers can be intertwined.
Payers
Healthcare payers are characterized as an organization, entity, or person(s) that pays for the care services that a healthcare provider has administered. Payers are responsible for collecting payments, paying provider claims, processing claims, and setting service rates.
There are three different types of payers in the healthcare industry:
- Government/Public. Government-funded health insurance plans like Medicaid and Medicare set amounts that they pay to healthcare providers. These amounts usually are less than the amount billed. Healthcare providers do not have the ability to discuss reimbursement rates for government-paid services.
- Commercial. Publicly-traded and third-party insurance companies generally arrange discounts with providers on behalf of the patients they represent.
- Private. Private insurance companies each offer different types of plans that are required to meet or surpass basic standards set by federal and state governments.
Each of these payers has its own rules and regulations regarding provider contracts, patient coverage, and reimbursement. Relationships between payers and their providers will differ, with some payers reimbursing providers for services rendered while other payers are directly contracted to providers.
Why are payers important in healthcare?
Payers play an essential role in providing patients with insurance coverage that is required to receive necessary services. Typically health insurance beneficiaries pay into monthly or yearly plans to ensure coverage (within range) for particular services or procedures. Payers also:
- Reduce fees for hospital and clinical services
- Help balance out the quality and cost of care
- Provide confidence that money is not wasted
Without payers, providers may not receive payment for services rendered, and patients would be liable for the total cost of their care.
Payers also generate critical data for the healthcare industry. For instance, each time a provider submits a medical claim, information is generated about that episode of care. Suppliers, providers, and stakeholders can use this data to access insights about provider referral patterns, diagnoses, co-morbidities, network affiliations, prescription volumes, etc.
Challenges payers face
There are many challenges that payers face in the healthcare industry, such as:
- Rising healthcare costs
- Aligning incentives with healthcare providers
- Providers entering into the payer field
- Increases in patient pay responsibility
- Increases in employer self-insurance
- Interoperability
- Consumer education around the comprehension of costs and coverage
Providers
A healthcare provider is an organization or person that provides a healthcare service. Providers are often mistaken for a healthcare service plan. The role of healthcare providers is to ensure that effective and safe disease control and prevention practices are maintained, continued expertise is maintained in organizational policies, and evidence-based best practices are implemented and maintained.
Healthcare providers ensure that effective infection prevention and control strategies are in place to identify, assess, analyze, and manage risks, promoting patient safety.
Examples of a healthcare provider:
- Institutions. Organizations such as ambulatory services, nursing homes, hospitals, and home health agencies.
- Individual practitioners. Therapists, physician assistants, physicians, and nurse practitioners.
- Ancillary providers. X-rays, clinical laboratories, outpatient services, and durable medical equipment (I.e., anesthesia machines, defibrillators, surgical tables, EKGs, etc.)
Essential services administered to patients include:
- Health promotion
- Counseling
- Preventative health
- Health education
- Diagnostics
- Treatment
- Screening patients.
Healthcare Payer and Provider Relationship
Understanding the nuances of payers vs. providers and how they interact is vital to understanding how the healthcare system works.
A complex collaboration of private and public entities work together to provide patient care. There are some instances where a provider and payers are the same entity, e.g., Veterans Affairs, where patients can receive care at the same facility that then covers the cost of care.
The role of healthcare providers and payers can be intertwined since payers are responsible for making sure that providers are compensated for their services and that patients can access affordable care.
In the U.S., the most dominant healthcare payment model has been the traditional “fee-for-service” model. This health insurance payment is a system in which healthcare providers are paid a fee for each service performed. This payment model essentially rewards healthcare providers for the quantity and volume of services performed, regardless of care outcome.
Recently, there has been a shift from fee-for-service to value-based care that rewards healthcare providers for patient outcomes and efficiency. The basic concept of value-based care models is to leverage the relationship between payers and providers to manage and coordinate care for kidney disease patients.
Healthcare payer-provider collaboration positively impacts:
- Data-sharing
- Responsibility and accountability
- Transparency
- Care and cost outcomes
- Patient engagement
In Nephrology, value-based kidney care models begin to address the shortcomings of the fee-for-service model by improving financial, patient, and clinical outcomes. A recent relationship between providers and payers is the 21st Century Cures Act, in which ESRD patients are encouraged to enroll in Medicare Advantage Plans. These proposed payer changes aim to encourage innovation and increase patient access to at-home dialysis.
Panoramic Health
Panoramic Health is a value-based care platform led by physicians. As a physician-led organization, we are uniquely positioned to understand the requirements of both payers and providers.
For providers, we offer the following:
- Value-based care options. We provide integrative technology, analytics, and workflow management to enable providers to deliver innovative value-based care.
- Ambulatory services. Our ambulatory services increase care coordination, contributing to lower hospital readmission rates, better patient outcomes, and better overall quality of life.
- Practice Management. Our comprehensive practice management solutions incorporate all aspects of marketing, administration, and operations.
For payers, we offer the following:
- Holistic care coordination. Patients can expect holistic care from nephrologists and a dedicated care team. Our value-based care platform helps patients with CKD to lower costs, improve their quality of life, and prevent hospitalizations by managing their full spectrum of health.
- Comprehensive care model. Our “plug-and-play” solution for the CKD3-ESRD spectrum includes holistic care management, data platform and predictive analytics, patient engagement, education, and access, and provider engagement and decision support tools.
