Home Health Series: Are Payviders Good for Home Health Consumers?
Health plans are going all in on the payvider model, but what does it mean for the industry and quality of care?
THE VBP Blog
August 31, 2023 – In the rapidly evolving landscape of healthcare, the payvider approach in home health has garnered a lot of attention. As payers and providers merge and streamline operations, they promise better coordination and enhanced patient outcomes. But like any new approach or model, when it comes to value-based payments, it brings with it looming questions.
In this blog, the second of our Home Health Series and the second on payviders, we will take a deeper look at the payvider model’s influence on home health. Keep reading to learn more about the benefits and challenges of the payvider model, and what it means for all stakeholders, consumers and payviders alike in the home health arena.
The Payvider Trend – A Quick Recap
While you can get a more in-depth analysis in our last blog on this topic, The Payvider Revolution and How They’re Reshaping the Home Health Landscape, we’ll provide a quick recap here.
First, what is a payvider? A payvider is a mutually beneficial partnership between a healthcare payer and a provider. Under value-based payment arrangements, providers get paid based on patient outcomes, instead of the number of services provided. Value-based systems are inherently riskier for providers and payers. Thus, the payvider model is that natural evolution that aligns payer and provider interests. As value-based payments creep into the home health industry and the Medicare Advantage population expands, both payers and providers see the potential for growth. That is why many big payers like UnitedHealth and Humana have purchased home health provider networks to establish themselves as payviders in the market.
United Healthcare and Humana Battling for Home Health Market Share
So, is the payvider model in home health a good thing for consumers? Looking at payviders across the healthcare arena, there are certainly benefits when aligning the interests of payers and providers to create a unified goal of delivering quality care in a cost-effective manner.
The risk-based arrangements align payer and provider incentives to provide quality care because that is what reimbursements are based on. By combining the payer and provider, payviders can focus on delivering the best possible care to patients, rather than just maximizing profits. This is good for payers and providers. However, it only benefits consumers if payviders choose to not be self-serving and do not sacrifice quality of care for savings. The payvider needs to continue to invest in quality of care and expanding not only access to services, but the types of services offered.
The payvider model can benefits consumers because the vertically integrated model allows for streamlined and enhanced care coordination. This can lead to faster treatment plans and whole-person care. And, because home health services are delivered in the home, it also allows providers to see social determinants of health. Social determinants of heath account for 30% to 55% of health outcomes. In fact, only 20% of health outcomes are explained by clinical care. The other 80% can be addressed by human services organizations. Being in the home allows providers to see what’s going on and intervene, which leads to better health outcomes.
With payviders, there is also enhanced data integration. This means payviders can better integrate and leverage patient data, driving more informed decision-making and personalized care plans. Many payviders—or at least the provider networks they purchase—have footprints across the country. This enables them to use the vast knowledge, data, and platforms from one state to another to improve quality of care.
In addition to the benefits listed above, in payvider models administrative burdens can be eased for consumers and providers. Through the offering of both insurance coverage and healthcare services, payviders streamline the process involved in the delivery of services and billing. This not only can improve the overall patient experience, but can also lower costs. What’s important to note here is that in order for this to be beneficial to consumers, the savings needs to be passed on in the form of reduced rates or utilized to enhance services. Otherwise, it’s just increasing the bottom line of the payvider and not helping the consumer in any way.
With all of these benefits, it’s easy to assume these models are great for consumers. In fact, according to a Guidehouse study, payvider arrangements are now the “preferred method to incentivize payers and providers that demonstrably improve member health outcomes and experiences at lower costs.” While this seems good in theory, health outcomes are not the same as quality of life and consumer experience. So, what have the actual results shown?
Humana has stated that they maintained a patient satisfaction survey star rating of 4 through CenterWell Home Health. They have provider partnerships with 21,000 hospitals and 43,000 physicians, which enables consumers to have some choice when it comes to choosing providers. There is also continued talk of expansion to expand to as many members as possible, as well as continued investment in the technology and platforms necessary to deliver quality care.
While payviders are relatively new in the home health market, the concept is not new, so we can also draw from what we’ve seen in other healthcare markets. One study from, The Economic Case for Vertical Integration in Health Care, showed that vertically integrated models of patient care and coverage, like payvider models, have been shown to outperform other models of care and coverage in patient experience and perception. With the financial risk shared between provider and payer under a VBP arrangement, it gives the provider more breathing room to focus on patient care and prevention, advocating for consumers instead of billing them for as many services as possible. In theory, this can create “wellness companies” that care more about the overall health of their patients because that is what they are incentivized to care about.
The Other Side of the Coin: Drawbacks of the Payvider Model
While the benefits are compelling, it’s crucial to acknowledge potential challenges to payvider models.
One of the most obvious is that there is a potential for conflicts of interest. Despite the unified model, there can still be internal conflicts, especially if the payer side prioritizes cost-cutting measures that might compromise care quality. While both parties share in the economic responsibility for the cost of health care, if costs surge, providers can blame payers and payers can blame providers.
There are also some barriers to entry. Smaller home health agencies might find it challenging to adopt the payvider model due to the significant capital requirement and complexities involved. This could result in them getting acquired by the larger behemoth organizations which can lead to concerns about over centralization and a lack of competition in the market. Some believe this could potentially stifle innovation while others believe it allows payviders to create a more diverse portfolio of access channels that may allow them to enhance consumer satisfaction.
Something else to consider is that the payvider model can limit consumer choice. In these models, the payers funnel consumers to the providers in their vertically integrated model. However, when employers are tied to certain insurance plans through work, that could limit their ability to choose the providers that they’d prefer to see. Consumer choice is crucial for patient satisfaction and is something that needs to be advocated for as the payvider model continues to evolve in the home health arena.
As you can see, there are certainly some challenges to consider when shifting to the payvider model for home health. However, to remain competitive, payviders will need to design a consumer-centric care delivery model that’s technology-enabled and focused on access to care, convenience and patient-defined outcomes.
The payvider movement in home health is not stopping anytime soon. With the emergence of Medicare Advantage plans and the financial opportunity the expanding value-based payment market presents, payers are increasingly looking for ways to increase their market share. While there are benefits to employing this model, it needs to be done with care and always with quality of care and consumer satisfaction at the forefront. Consumers need to have choices in the providers that offer care and deserve a good experience, which means that payviders must ensure that they are always working to enhance service offerings and better coordinate care, and to ensure that they continue to invest in and build their network. Given the risk that payviders have taken on, they will need to focus on delivering the right care in the right setting. In the home health market, the lowest cost option often means delivering care in the home through in-home healthcare services, remote patient monitoring and telehealth. While we ultimately want to know if the payvider model is better for consumers, the big picture answer is still, “we’ll see,” as there is limited evidence out there in regard to the home health industry. The team at XtraGlobex will keep a close eye on any developments and, as always, keep you updated.
Keep an eye out for our next Home Health Series Blog, in which we will be covering Hospital at Home. We will delve into trends and recent updates, and what they mean for consumers!
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About the Author
Fady Sahhar brings over 30 years of senior management experience working with major multinational companies including Sara Lee, Mobil Oil, Tenneco Packaging, Pactiv, Progressive Insurance, Transitions Optical, PPG Industries and Essilor (France).
His corporate responsibilities included new product development, strategic planning, marketing management, and global sales. He has developed a number of global communications networks, launched products in over 45 countries, and managed a number of branded patented products.
About the Co-Author
Mandy Sahhar provides experience in digital marketing, event management, and business development. Her background has allowed her to get in on the ground floor of marketing efforts including website design, content marketing, and trade show planning. Through her modern approach, she focuses on bringing businesses into the new digital age of marketing through unique approaches and focused content creation. With a passion for communications, she can bring a fresh perspective to an ever-changing industry. Mandy has an MBA with a marketing concentration from Canisius College.