Market Share Disruption with a Committed Health System/Payer Partnership

Shawn Fitzgibbon, Managing Director, BDC Advisors

With shared analytics and a longer-term perspective, health systems and payers have a unique opportunity to transform local and regional markets. Are you ready to break the cycle of unit cost battles, compromised short-term solutions, resulting in consumer dissatisfaction—and disrupt your market to capture a greater share with a committed partner?

Success for payers and providers rests on establishing long-term predictable and sustainable revenue. Whether premium revenue or reimbursement for services provided, both parties must understand their leverage points related to market share dynamics, underlying decision drivers, and benchmark rates and costs supporting the services and products they offer in the market. It is also critical for each to embrace their respective unique relationship and proximity to the patient or enrollee consumer.

Health system participation in the payer network, its role in enabling market entry for the payer, and the impact of contract rates on total cost are key factors in aligning the goals and objectives of both parties. Approaching these dynamics as a basis of alignment enables a partnership and participation strategy approach that best suits the health system, the payer, and population served. Solely focusing on the next contract term and rate negotiation fails to position each party for long-term success.

BDC Advisors believes in the strategic importance of developing a market-based portfolio management approach to contracting based on a foundational understanding of payer and health system requirements. Each geographic market has unique characteristics defined by health system and payer competition and related market share, population demographics, employers, plan/product offerings, and government program participation and penetration. These elements must be modeled to create a market specific aligned payer-health system strategy.

It is well understood that commercial and government program products, whether group or individual, ASO or fully insured, are offered in a competitive environment. Groups and individuals are making plan choice and enrollment decisions based on cost, network, pharmacy, plan design, and service. While payers and providers must manage their own operating expenses, there remains significant areas of opportunity to collaborate to manage total cost of care and create systems of care that improve outcomes. It is precisely these areas that BDC assists clients to align the incentives to grow market share, retain enrollees and patients, and build brand loyalty.

Whether on a single line of business or a full product portfolio, there remains unrealized opportunity for payers and health systems to identify partners committed to achieving mutual goals and objectives of growth, resulting in greater capture of the addressable market. Rather than promoting misaligned models and short-term value-based care arrangements, BDC recommends deeper collaboration—tailoring products to networks and aligning premium to cost. Expanded opportunities exist to develop integrated systems of facility, ambulatory, physician, and post-acute care that better serve patients and enrollees, all focused on more effectively managing total cost of care and serving patients and enrollees more effectively.

The future of payer-provider collaboration is about building resilient partnerships that redefine the local and regional market, improve outcomes, and deliver lasting value.

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If your organization is ready to disrupt your market to capture a greater share with a committed partner, please contact Shawn Fitzgibbon, Managing Director, BDC Advisors, at (332) 373-5546 or shawn.fitzgibbon@bdcadvisors.com.