Our Perspective

Navigating Healthcare Affordability: Negotiating Contracts Between Health Plans and Health Systems

Mar 19, 2024 | 5 minute read
Written by Healthsource Staff

As part of our commitment to making healthcare more affordable and accessible, Premera is sharing insights from a recent Thought Leadership Forum hosted in partnership with the Puget Sound Business Journal in a new series on our blog, beginning here.

This ongoing series, Navigating Healthcare Affordability, takes a closer look at topics raised at the forum and how Premera is working to prioritize critical work around these issues.

Expert panelists bringing their knowledge and experience to the discussion included Lee McGrath, Executive Vice President of Healthcare Services at Premera Blue Cross; Dr. Imelda Dacones, Market President of Optum Pacific Northwest; and Brenda Yoo-Young, Managing Director of Slalom Consulting.

Regardless of where you work in healthcare, the goal remains the same: delivering access to quality care that improves health outcomes for the communities that you serve. At Premera, we do this by maintaining successful partnerships with healthcare providers, ensuring our members have access to quality care at affordable prices. We can’t deliver on this commitment without being on the same side of the table as our provider partners.  

However, recently, the healthcare landscape has been flooded with headlines about contract negotiations between healthcare systems and health plans. Routine deliberations that were once conducted professionally between the parties involved are now increasingly unfolding in public view. And termination notices—declarations of intent to end a contract between a health plan and a healthcare system—have moved from an option of last resort to become a common opening tactic employed by healthcare systems in these negotiations.  

Unfortunately, these recent changes to how healthcare negotiations are conducted cause unnecessary angst and confusion among consumers as they wonder and worry about potential changes to their network of available healthcare providers.

“I think when someone holds a Premera ID card or really any insurance card, they are expecting access and when access is threatened, our customers get stuck in the middle,” McGrath said. “We have to continue to do better and be better, understand the needs of the provider community, the payer community, the employer group, as well as the needs of the individual customer.” 

Reliable access to care is a cornerstone of the patient-provider relationship. The rapport and trust built over time are key to effective treatments and patient satisfaction. Public contract disputes threaten that peace of mind for both providers and patients, damaging the hard-earned sense of stability and trust that comes from long-term provider relationships. 

“I’m in a profession where I took an oath, and putting patients in the middle of this is causing avoidable stress, avoidable angst, and avoidable confusion,” said Dr. Dacones.

As McGrath pointed out, “Terminations also come with double-digit increases and that doesn’t help affordability at all.” What is a viable solution then? Dr. Dacones sees this point of tension as an opportunity for all parties—payers, providers, and policymakers—to push the pursuit of value-based care to the forefront.

Value-based care is a payment model that rewards healthcare providers for achieving better outcomes and healthier patients. This is a shift away from the traditional fee-for-service model that is based only on the number of services provided.

Recognizing the importance of transparent, good-faith negotiations, Premera is working to bridge the divide between healthcare systems and health plans, ensuring that our members can always access quality care from the providers they know and trust without the burden of uncertainty—financial or otherwise.

In our next installment of our Navigating Healthcare Affordability series, we will more deeply explore the role technology can play in improving patient experiences and healthcare outcomes. Join us as we continue this critical conversation in pursuit of a healthcare system that works better for all. 

Healthsource Staff
Healthsource Staff

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