The Key to “Tailored Networks”: Payer/Provider Collaboration

Another day, another report emerges on the huge losses commercial payers are incurring on individual plan products on the health insurance exchanges with the so-called “risk corridors” providing little or no protection from such losses. 

The premise of “risk sharing” between providers, payers and consumers within carefully defined networks should, in principle, offer an ideal structure to deliver high quality coordinated care with strict adherence to care protocols. 

Unfortunately, the yin and yang interplay between payers and providers within these networks has largely been based on a tradeoff between reimbursement premiums and patient volume driven by the privilege of being included in the exclusive networks. 

Unless both industries can find a transparent method to understand each others business – efficiencies will not be achieved.

It demands collaborative solutions.

The problem today, is that providers are unwilling to “devalue” their services and put thin profit margins at further risk in these arrangements. Rather they choose to opt out of participating in “narrow” and “ultra narrow” networks that tradeoff low premiums for the promise of higher volumes.  They do this because they can’t quantify risk accurately. This is a capability that payers have built their entire industry. Remember, actuaries were the first data scientist.

Payers, on their side, with little or no visibility into cost of care and care processes are only equipped to have a conversation around premium discounts and access

Imagine a new conversation between payers and providers that moves away from adversarial premium discount and access negotiations. 

Imagine a conversation around jointly developing plans that can be differentiated on superior cost, quality, outcomes and patient satisfaction. 

Imagine payers and providers jointly articulating the value of such products to employer groups and individuals. 

Value that promises the most cost effective and efficacious care by eliminating unnecessary variation, establishing the most appropriate standards of care “tailored” to specific sub populations. 

Providers will have much greater confidence in their profitability within such plans. 

Payers can move from being adversarial price negotiators to being informed price setters with the full cooperation from providers who have helped define the tailored services.

The key is that collaborative design of tailored plans and services will need a new generation of care delivery design tools.  Such a solution will exhibit key capabilities to:

  • Combine clinical and financial data from providers EMR and cost accounting systems alongside payer based claims systems to gain granular views into care processes and true cost of delivery

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Fig 1. Visualization of individual patient treatment paths on a normalized timeline around the start of surgery for example. Color coded tick marks indicate different classes of granular clinical interventions (labs, meds, utilization of surgical supplies etc. Item level costs derived from cost accounting systems are used to compute total cost of treatment for each patient


  • Discover prevailing practices of key episodes of care with high utilization and known variability in processes and supplies


Fig 2. Automatically discovered groups of patients with similar treatments. Prevailing variations are quickly identified and surfaced for further investigation

  • Clearly correlate care choices with outcomes and inform on expensive service choices not impacting outcomes

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Fig 3. Identify potential physician preference items impacting cost with no impact on Length of Stay


  • Quantitatively define service bundles that achieve the best outcomes and provide the transparency to plan purchasers

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Fig 4. Data driven care paths are collaboratively and transparently tailored for targeted populations. These care paths are instantiated as standard care process models and reimbursed as standard service bundles for targeted high cost, high variation procedures.

  • Continuously monitor adherence to tailored care processes and service bundles

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Fig 5. Continuous tracking of adherence to detailed standards of care with a close eye on impact on outcomes. Data driven rationalization for inclusion / exclusion in tailored networks.

  • Adapt to emerging nuances in subpopulations

Ayasdi Care is a next generation platform designed for data-driven discovery, design and monitoring of simultaneous tailored care process models.  

Leading health systems are already making breakthrough discoveries within existing practice areas – finding treatment protocols that existed in pockets within their systems but had material impacts to the quality and cost of care. These are not small discoveries, but big ticket in-patient procedures including total knee replacement, colo-rectal surgery, laporoscopic gall bladder surgery. 

Such data driven insights have informed clinically defensible and clinician championed care process models. 

The journey to value based care starts with understanding and managing clinical variation. With that knowledge the stage is set for payers and providers to move to a new model of true value-based, accountable, mutually profitable and non-adversarial care design.