The long view of healthcare

Closer ties between payers and providers could facilitate better healthcare, and better contracting

Journal of Healthcare Contracting readers don’t need to be told that hospital systems are acquiring physician practices at a rapid pace. The trend is changing your job, expanding your responsibilities, forcing you to learn about aspects of patient care with which you might not have been familiar.

But there’s another trend equally fascinating, also full of challenges and opportunity. In our April issue, we interviewed William O’Connor, senior vice president of Provider Supply Chain Partners in Pittsburgh. This healthcare supply chain company has ambitious supply-chain-related plans, including group purchasing, distribution services and biomedical engineering. It has one more distinguishing characteristic – it is owned by an insurer, Highmark, an independent licensee of the Blue Cross and Blue Shield Association.

Across the nation, there is a growing involvement of insurers in the delivery of care. Cigna, Aetna, Independent Health, Highmark and others are forming accountable care organizations and joint ventures with providers. In this month’s issue, you’ll read about SharedClarity, a for-profit, limited liability corporation, jointly owned by insurer UnitedHealthcare and three healthcare systems – Dignity Health, San Francisco; Advocate Health Care, Oak Brook, Ill.; and Baylor Health Care System, Dallas, Texas. (Participants expect more IDNs to participate in future months.) Their goal is to pool their data and use it to conduct studies about the effectiveness of various medical devices, and then to collaboratively contract for the most effective ones.

If we as a society are committed to improving the health of people, then this all makes sense. After all, hospital executives have episodic data on their patients. They know what happened to a person when he or she came in for their hospital procedure. But they don’t know nearly as much about what care that patient received in the weeks, months or even years prior to admission, or what happened to him or her following the hospital stay, whether it involved nursing home care, home care, physical rehab, etc. Insurers, on the other hand, have a long-range view of that patient. They know about doctor visits, prescriptions, home care, even visits to the chiropractor, not to mention details of the patient’s hospital stay. Marry these two sets of data, and this could be the beginning of a beautiful relationship.

So what does this mean for contracting executives? In the case of SharedClarity, it has a direct impact on contracting, as hospital systems and insurers pool their knowledge about the performance of medical devices and procedures, and then use that knowledge to negotiate contracts with vendors.

At last, it seems, data may be the thing to bring into alignment the interests of contracting executives and clinical staff – to improve the health of a given population in a cost-effective manner.

About the Author

Mark Thill
Mark Thill is the Editor of The Journal of Healthcare Contracting and has been reporting on healthcare supply chain issues since 1985. He is a graduate of Dominican University in River Forest, Ill., and he received a master's degree in journalism from Northwestern University in Evanston, Ill.