The healthcare industry is in a perpetual state of flux. However, while the progress may seem to move at a glacial pace, that does not discount the need for healthcare organizations from payers and providers to plan for the future.

“The traditional ‘silos’ of medical, behavioral health and social services can’t meet the needs of our population alone,” Jim Hickman, CEO of California-based Better Health East Bay, part of Sutter Health, told Healthcare Dive back in November 2016. “Partnerships, enabled by technology and amplified by data-sharing, are the first step in changing the way we deliver care.”

To that end, value-based care, consumerism, partnerships and technology will be shaping the design of payer models in the future, a new survey from PricewaterhouseCoopers finds. The report lays out five new payer models to help guide insurers on how to focus their business strategy in the coming years. While these models are not mutually exclusive, they do belie the need to improve relations within the care industry.

"Under any scenario, the relationship between payers and providers has to improve," Paul Veronneau, principal at PwC, told Healthcare Dive.

The new models

To succeed in the emerging healthcare landscape, PwC suggests payers specialize according to what target patient market they are trying to capture. The following models outlines different strategic thinking for payers as they move forward:

• Consumer Advocate - Utilizes easy-to-understand, simplified plans and increased access to information.
• Bridge Connector - Helps relationships between patients and providers by playing an active role in getting patients the right care.
• Lean Operator - Prioritizes efficiency gains via core insurer functions such as claims adjudication and utilization review.
• Analytic Sensor - Uses data analytics to provider caregivers insights into population health.
• Care Integrator - Integrates vertically to align incentives, improve care coordination and help drive down medical costs.

Veronneau noted that healthcare is local so competition in the payer space is defined locally in each market. Thus, one payer model that may work in one market may not work in another. In addition, one payer may be more equipped to move forward as a traditional Lean Operator while a new market entrant might decide to adopt a different, more analytical model. As Veronneau says, these models are not mutually exclusive so payers need to think about their current business status and future market plans to address what to invest in for the future. These investments, partnerships and changing structures will likely move as markets adapt to the changing healthcare landscape.

On that changing landscape

The future of the individual insurance market as well as Medicare and Medicaid has been called into question since November's presidential election. This week, GOP leaders released an ACA repeal-and-replace bill that has been generally panned across the political spectrum. PwC acknowledges this uncertainty in the marketplace and says changes will affect payers differently. "Health insurers will need to remain nimble, monitor developments closely and consider near-term strategy adjustments to take advantage of opportunities as they arise," the report states. "However, it will be equally important to focus on planning for that which is known as the major forces transforming healthcare are unlikely to change."

Veronneau reiterated the importance of locality for insurers in their business and that while the number of individuals with or without insurance may change as policy comes out of Washington, it is important for insurers to check their surroundings when thinking about next steps.

What the survey found

PwC surveyed more than 100 health insurance executives to get a gauge on what they are thinking about for the future of their business. As it turns out, many are interesting in partnerships and engaging with technology. About a third (33%) believe that they need to increase collaboration with providers and 56% said data sharing partnerships with other organizations will be crucial.

This seems on brand for payers in an emerging value-based care (VBS) world, according to Veronneau. While payers and providers may not always play nicely in the industry sandbox, a move to VBC in theory helps align provider and payer incentives to keep a patient healthy. As 69% of respondents believe the risk will continue to shift onto consumers and providers and 24% think it’s important to achieve higher levels of consumer and engagement satisfaction, Veronneau said "the beauty of VBC is based on win-win relationships." 

When VBC is done right, payers, providers and patients all win, Veronneau said.

The survey also took a vibe check on technology adoption for insurers and what they plan on implementing in the next five years. Unsurprisingly, the main tech currently being adopted – cybersecurity (88% currently implementing), data analytics (73%), digital marketing (54%) and a web-enabled platform (50%) – have been field tested and adopted in other industries. Emerging technologies such as blockchain (12%), augmented reality (14%) and artificial intelligence (19%) are a bit low on the adoption scale currently, which makes sense as they are emerging tech and healthcare is slow to adopt technology. However, Veronneau said while they may have lower penetration in the market, they have great potential in the industry.

What insurers should consider

Still, a survey of 1,500 clinicians found 70% of them do not participate in a risk-based, incentive-based or shared-savings reimbursement model. At the same time, employers are beginning to question what other organizations besides insurers can do to help them manage costs and keep employees healthy. And the CMS has set a goal of having 50% of traditional Medicare payments flowing through alternative payment models by 2018 so, glacial pace or not, insurers should look toward the future with an openness for change. 

The report gave some quick pointers for insurers to consider moving forward:

• Find a way to play - Insurers should identify and pursue areas for innovation and opportunities while capitalizing on current strengths. 
• Build trust - Build up the historically low trust level among providers and customers.
• Balance technology with a human touch - Think how the use of technology can enhance the customers' knowledge through user-friendly interfaces, tools.
• Invest in workforce - Whether it is a data analytics position or a consumer relations position, insurers should invest and work to maintain their workforce.