The development of the Diagnostic Related Group in the 80s, efforts to integrate hospitals, physicians, and managed care in the 90s, and early steps in outcomes-based reimbursement in the first decade of the millennium have moved health care incrementally towards greater consolidation and integration. Challenges along the way included lack of adequate data warehousing and interoperability, as well as fragmented (sometimes adversarial) business and management policies among distinct healthcare groups.
Substantial technological efforts to improve data-sharing and access, as well as to help health system leaders facilitate and manage change, have helped set up the infrastructure for independent care delivery networks (IDNs) to form. Incentives and advantages exist for distinct marketplace stakeholders to affiliate themselves with an IDN:
- Patients: IDNs are regional organizations and can focus on a particular community’s most prevalent issues, including mental health or substance abuse issues.
- Employers: IDNs offer employers more affordable employee benefit plans because IDNs are in a strong position to both coordinate care and manage purchasing costs.
- Providers: IDNs offer providers access to increased patient volume, higher reimbursement, protection from risk, reduced administrative burden, and inclusion in value-based payment models.
Large and complex IDNs are now a life sciences product customer, and a formidable one. They are headed by elaborate webs of decision-makers, dominate the medical facilities of a region, are backed by clinical integration and data-sharing technology, and control physician prescribing patterns. Some even offer their own health plans. Unlike payers, whose insured base changes significantly each year, IDNs have a fairly stable patient population. This is a critical point of difference. Since their population is likely to change, payers focus on short-term savings; by contrast, IDNs care very much about population health, and, knowing that a healthier population base will lower their total cost of care, are willing to take risks for it.
Successful partnerships between payers and IDNs can exist, and IDNs recognize that payers have to win too in order to make for a viable partner. However, IDNs expect payer representatives to have done their homework, and thoroughly, before coming to talk. Key steps that payers can take to cultivate a fruitful partnership (rather than a transactional relationship) with an IDN include:
- Knowing how the IDN is organized, who its key players are, and how decisions at that organization are made
- Researching the IDN’s key metrics ratings and coming with ideas on how to improve those
- Researching the IDN’s geographic area and demonstrating an unmet need
- Discussing the IDN’s priority areas and aligning with those
- Understanding the IDN’s timelines and planning accordingly
- Giving importance to above-brand partnerships (these will be viewed as true partnerships rather than sales pitches)
- Providing a knowledgeable and responsive point of contact for the IDN