If health plans are to move forward in collaborative efforts under health reform, they might need to polish their reputations first. According to a provider survey conducted by ReviveHealth, a strategic communications firm, Cigna and independent Blue plans earn the highest rankings—with “highest” meaning just 49% of respondents viewing them as having a favorable reputation.
WellPoint/Anthem showed just a 16% favorability rating, ranking worst among the plans reviewed for the second year in a row.
“The number one thing this survey reveals even more significantly this year than in past years is that trust between managed care organizations and provider organizations has deteriorated to an all time low,” says ReviveHealth CEO Brandon Edwards.
And reputation matters at the negotiating table. Distrust can result in provider resistance such as driving a harder bargain on rates or being less flexible with contract agreements.
“The distrust has practical business implications,” he says. “So many of the business strategies that are being and will be implemented in the future around risk sharing and quality based payment all have some level of required trust.”
Quality-based arrangements often involve multiyear contracts in order for the provider to gain the benefit of shared savings over time. Edwards says this year and for the past two years, more contracts were short-term because of skittishness about health reform. Managed care wanted the contracts to expire before 2014 so renegotiations could include reform provisions.
In survey results, Aetna (22%) and Cigna (19%) were identified as having the best hospital payment rates, while independent Blue plans—even with their higher favorability—were rated as having the worst rates (-28%). The results are consistent with prior year surveys. Rate negotiations will become more creative as reform rolls out.
Edwards says the trend of payers buying providers will likely continue, such as Highmark’s recent purchase of West Penn Allegheny Health System for $604 million. In many cases, unique deals and crossownership will lead to narrow-network products.
“Narrow networks could be an indicator of selective trust,” Edwards says.
For example, BlueCross BlueShield of Tennessee and Erlanger Health System announced in April they will create a partnership starting July 1 under a five-year narrow-network contract. Erlanger will remain in BlueCross' existing network through 2018 and will be the exclusive Chattanooga hospital in the plan’s network designed for the insurance exchange.
“We know from media reaction in the market and reaction from other hospitals there was deepening distrust between the other providers and BlueCross because the first they heard about it was in the newspaper,” Edwards says.
He believes the negotiations could be a strategy of scarcity. In other words, payers are offering only so many opportunities for new products and providers have to decide to be ultimately in or out.
In the survey, 23% of providers say they are planning a narrow-network program with payers, and 29% have one in the works. Only 11% say they have no plan to begin a narrow-network arrangement.
As far as new initiatives go, Blue plans rated high with 30% identifying them as being the best to work with, while UnitedHealthcare was rated as the worst to partner with by 23% of respondents.
ReviveHealth also notes macro trends among payers:
Risk shifting – risk shifts to employers or providers
Consolidation – plans buy up other plans
Vertical integration – plans build or buy provider organizations
Market dominance – a single plan holds a large marketshare in several states
Obfuscation – confusing language used with members
Exchanges – plans will compete with new product offerings
More than 370 health system and hospital leaders completed the survey.