How Hospitals, Physicians and Health Plans Can Align to Achieve Sustainable Growth

By Jay P. Hazelrigs, ASA, MAAA, Vice President, Optum Advisory Services
Erik Johnson, Vice President, Value-based Care, Optum Advisory Services and
Braxton Millar, Senior Director, Optum Advisory Services

Past value-based growth strategies in health care were based on individual efforts by physician groups, hospitals and/or health plans. But they rarely succeeded or proved sustainable. Today, innovative health plans and providers are considering collaborative models to lower care costs and achieve the right growth for their organizations.

Rather than rewarding short-term transactions in the traditional fee-for-service model, the value-based approach focuses on measuring value in terms of long-term patient outcomes. Providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way. With these goals in mind, hospitals, physicians, health plans and patients have been exploring the value-based approach.

The concept of working together doesn’t come naturally, however. Although growth is an objective that health plans and providers share, it takes different forms for each. Also, health plans are limited in their ability to influence quality, cost-effective care at the patient level. Put simply, it’s hard for them to see the individual trees.

Providers, on the other hand, can be limited in their line of sight to the complexities of effectively managing risk — or to see the forest. It can be difficult to move beyond traditional mindsets to imagine a scenario where providers, health plans, and patients are more aligned.

Expanding Perspectives

Think of collaboration as a way to create the most complete view of value-based opportunities. Working together, stakeholders can gain the perspectives they need to yield value for all. This is what success through collaboration can look like.

Tactics to Jump-Start Collaboration

Collaboration provides the opportunity to disrupt a region with a more competitive, patient-friendly experience. Here are three ways to begin:

1. Identify mutual goals.

Collaboration requires thinking about the patient from the other’s perspective. Health plans consider the clinical and patient views more than ever. Providers evolve their ability to take ownership of lives rather than episodes of care. Each stakeholder must determine how they can work together to develop a more affordable and differentiated experience for employers and patients in a way that fundamentally disrupts incumbents.

2. Develop shared data sets to identify risks and rewards.

Data sharing and integration enable health plans and providers to identify and validate what each can achieve by working together. A shared data set should include claims and clinical data as well as social determinants of health for specific populations. Careful analysis of this data can pinpoint where excessive costs exist for specific populations. And it can provide a basis for collaboration in designing value-based solutions.

3. Build a framework together for value-based growth

  • Identify the key capabilities needed to enable shared risk and benefits — the overall strategy.
  • Collaborate on the data and sharing knowledge to develop value-based objectives.
  • Identify the market segments ripest for disruption and key populations.
  • Evaluate the actuarial opportunity, pricing/financial models and market share business case.
  • Determine the enabling technology and talent road maps.

Once the strategy is defined, build and operationalize the models together, including:

  • Designing products aligned with target populations.
  • Configuring the network, and aligning and engaging providers.
  • Aligning care pathways with financial and quality models.
  • Building work streams and performance reports to enable transparency and operational excellence.
  • Developing care coordination and consumer engagement plans.


Working Together Gives A Complete Perspective

New value-based models are emerging. All emphasize the need to go beyond surface relationships to build a deeper mutual commitment that supports shared growth objectives. It’s increasingly evident that the fastest way to make significant and sustainable progress toward value is through payer and provider partnerships. Learn more about creating the path to sustainable growth at

About Optum

Optum is a leading information and technology-enabled health services business dedicated to helping make the health system work better for everyone. With more than 160,000 people worldwide, Optum delivers intelligent, integrated solutions that help modernize the health system and improve overall population health. Optum is part of UnitedHealth Group (NYSE:UNH). For more information, visit



Source: Harvard Business Review


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