One of the themes of this week’s 2015 OPEN MINDS Strategy & Innovation Institute was the increased interest from Medicaid health plans in entering into value-based and risk-based contracts with provider organizations (see Taking Strategy & Innovation From Concept To Reality and The Innovations In Medicaid Managed Care Shaping The Current & Future Market). This shift is both a challenge for the executive teams of provider organizations and an opportunity. But how can organizations capitalize on this shift?
This challenge was the focus of a session, Marketing To Medicaid Managed Care & Commercial Insurance Plans, lead by my colleague, OPEN MINDS senior associate Steve Ramsland. In the session, Steve discussed how management teams should develop and execute a strategy to sell their services (hopefully, higher margin services) to health plans. Steve was joined by Matthew O. Hurford, M.D., Vice President, Medical Affairs, Community Care Behavioral Health Organization to discuss the payer perspective on this question; and John F. Talbot, Ph.D., Vice President, Corporate Strategy, Jefferson Center for Mental Health, & Advisory Board Member, OPEN MINDS to offer the provider organization perspective.
More managed care; more risk-based contracting; a greater focus on value in terms of cost versus quality; and new service models focused on care management (From Strategy To Action), means that the traditional roles of health plans and provider organizations are changing. Health plans are shifting from carve-out by specialty, to carve-out by consumer type (The Vertical HMO Arrives ); the role of care coordination and population management is moving from health plans to provider organizations (Improving Population Health Management With Public Health Approaches); and there is a blurring of the lines between health plans and provider organizations – through acquisitions or gainsharing agreements (Where Are We With The ‘Kaiser-fication’ Of The System?).
In this emerging environment, marketing to managed care is an important sustainability strategy for the management teams of provider organizations. This means understanding what the payers in your market are asking for and developing a plan to leverage your organization’s core skills and assets to meet their needs and demonstrate the results.
For Dr. Hurford, this means managers of provider organizations should be able to answer one key question: What do you bring to the table that would make health plans and manged care organizations decide to pay you more? But remember to answer this question in terms that are meaningful to health plan executives. Stay away from presentations that focus on how hard your organization’s staff work and don’t claim that your team works with the “most severely ill” population unless you can demonstrate that fact. Instead, focus on quantifying your organization’s value using data. Dr. Hurford offered this advice for demonstrating value to payers – ask and answer these questions before you approach a payer with a program or service:
- Can you promise anything that will lead to savings for the payer?
- Can you promise anything that will lead to improved outcomes?
- How are you measuring all of this?
- Can you state your value in a few simple sentences?
Additionally, Dr. Huford advised that once you have an arrangement with a payer in place, it is important to get the arrangement in writing (including the measurement system for monitoring results) and then communicate with your staff so that everyone within the organization not only understands the services to be provided, but also the desired outcomes and why those outcomes are important to you, the payer, and your consumers.
Following Dr. Hurford’s presentation, Dr. Talbot offered an example of this strategy in action. He discussed Jefferson Center’s recent partnership with a statewide Accountable Care Organization (ACO) in Colorado. The ACO needed to build behavioral health delivery system capacity and increase their ability to manage risk-based contracts. The Jefferson Center team was interested in filling this need for the ACO; however, they currently operate in a three-county area. So to meet the needs of this ACO, they opted to form a partnership through their state association with 17 other behavioral health organizations. Together, this 17-organization partnership was able to offer the ACO a statewide solution to meet their behavioral health needs under one contract.
In closing, Dr. Hurford and Dr. Talbot noted that regardless of your market or your payer, these basic principles of developing payer partnerships hold true – Offer solutions, demonstrate your value, and continue to evolve and grow to meet the needs of your payers.
Thank you to all of the speakers, sponsors, and attendees who joined us in New Orleans this week, and if you couldn’t attend the institute this year, be sure to check out our coverage of the institute on Twitter @openmindscircle – #OMStrategy and mark your calendars now for The 2016 OPEN MINDS Strategy & Innovation Institute.