The payer-provider relationship is tough as inflation increases the cost of care while insurance companies aim to keep costs down in preparation for the aging population to expand.
"You have significant inflation with labor and really a supply and demand imbalance that we've never seen before," said Dan Liljenquist, chief strategy officer for Intermountain, during an interview for the "Becker's Healthcare Podcast." "You've got, in the next several years, a tail end of the baby boom generations retiring at a time when you have the greatest increase in demand, you have the largest decrease in supply of providers in the history of the country. That's exacerbated the challenges for health systems and payers to make sure that healthcare is affordable."
The tension is especially high for healthcare providers paid transactionally under the fee-for-service models because payers can cut rates, increase denials and question services. Hospital leaders are also seeing their margins as tight or negative, and still need to provide elite services to the community.
"The way Intermountain is thinking about our strategy is to partner very closely with payers on full risk arrangements, and we were willing and able to take full clinical and financial accountability for populations of people believing that by aligning those incentives, we can do a better job of keeping people well and making sure premiums going forward are predictable and affordable," said Mr. Liljenquist. "But it's tricky. Even as large as Intermountain is, only a third of our revenue is in fully capitation arrangements, and it's a battle."
Mr. Liljenquist and his team are aligning with payers for further value-based care and eventually aims to not work with payers who don't want to move in that direction. Health systems in the past have been able to push commercial rates to make up the difference when government payer rates increase slower than inflation, but Mr. Liljenquist said "there's no way to make up that difference going forward."
He expects there will be some payers who lean away from hospitals while others decide to partner.
"We ultimately think that by offering a different solution for payers, and we have Select Health, but we also have a multi-payer full risk strategy that we'll work with payers on who really want to change the healthcare delivery model," said Mr. Liljenquist.
Prior authorizations and denials delay care delivery and frustrate clinicians within the fee-for-service model. But within value-based models, the payers and providers have the opportunity to create a new method for healthcare delivery with the same incentives.
"We're far more interested in working with payers who want to align payment in such a way that we can create something new that recognizes the old model is not scalable in a way that will make healthcare affordable and accessible to people going forward," said Mr. Liljenquist.