Payer/Provider relationships

Yujin Kim/Healthcare Dive

Note from the editor

Payers and providers have always had to work with each other in healthcare, and as M&A intensifies and companies are more likely to embrace more holistic and value-based care models, the partnerships have become more closely intertwined.

That doesn't mean, however, that they necessarily get along. The hospital and payer lobbies often clash, most recently about the role provider consolidation plays in price increases. The debate has been exacerbated by the Biden administration's attempts to crack down on anticompetitive practices.

Growing price transparency efforts have pulled back the curtain on just how much a patient's insurer can affect the costs of a procedure. Healthcare Dive's recent data analysis found that the cost of a joint replacement at the same hospital varied from about $23,000 to more than $100,000 depending on the person's plan.

The COVID-19 pandemic affected the sectors in different ways. Hospitals took a hit to their bottom lines when they were forced to delay nonemergency care to devote resources to fighting the coronavirus, many of them relying on federal bailout funds to stay afloat. For insurers, not having to shell out for those procedures was a boon. That may not be the case for long, though, as those who postponed care seek it out again.

Payers and providers also clashed when it came to debates in Congress that ultimately culminated in legislation banning surprise billing. While lobbies for both groups said they support a ban in concept, they had different plans for getting there. Providers got the upper hand when the No Surprises Act was passed, as it included an arbitration clause for helping determine rates for out-of-network providers and no benchmark rates.

These tensions will continue, and startups and other companies not traditionally in the healthcare space are likely to try to elbow into the fractures that creates.

Shannon Muchmore Senior Editor

Hospitals lift curtain on prices, revealing giant swings in pricing by procedure

The eye-popping variations just demonstrate "the total insanity of American healthcare pricing," Niall Brennan, CEO of the payer-backed Health Care Cost Institute, said.

• Published March 11, 2021

Many insurers are no longer waiving cost sharing for COVID-19 treatment

• Published Aug. 20, 2021

AHA moves to shift cost blame to health plans in letter to antitrust regulators

• Published Aug. 19, 2021

SSM Health, insurer Medica to launch joint venture

• Published Aug. 19, 2021

UnitedHealth settles for $15.6M after Labor Department finds mental health cuts, denials

• Published Aug. 12, 2021

CVS Health's Aetna unveils nationwide primary care telehealth service

• Published Aug. 11, 2021

Delaware tries capping hospital price growth to fund more primary care

A multi-pronged bill also forces certain payers to tie nearly half of their business to alternative payment models by 2023, and create shared accountability for both the cost and quality of care.

• Published Aug. 9, 2021

DOJ reportedly considering suit to block UnitedHealth-Change tie-up

• Published Aug. 5, 2021

Medicare-reliant hospitals perform worse financially, more likely to face closure or acquisition: Health Affairs

• Published Aug. 3, 2021

First of surprise billing ban rules mum on arbitration details

• Published July 1, 2021

Inside the relationship between providers and payers

Payers and providers have always had to work with each other in healthcare. As M&A intensifies and companies are more likely to embrace more holistic and value-based care models, the partnerships have become more closely intertwined.

included in this trendline
  • Hospitals lift curtain on prices, revealing giant swings in pricing by procedure
  • Many insurers are no longer waiving cost sharing for COVID-19 treatment
  • AHA moves to shift cost blame to health plans in letter to antitrust regulators
Our Trendlines go deep on the biggest trends. These special reports, produced by our team of award-winning journalists, help business leaders understand how their industries are changing.
Davide Savenije Editor-in-Chief at Industry Dive.