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July 15th, 2024
The details that determine provider payment are now in the public domain, affecting every health plan operating today. This unprecedented change doesn't just foster a more informed public—it also sparks a vibrant new dimension of competition among health plans along with a dual challenge and opportunity: navigating complex competitor files and using them to forge a competitive edge.
At Vairate, we understand the nuances and potential of this data. For executives steering their organizations through these changes, mastering this data is a necessity. With the right approach, the insights gleaned from competitor rates can drive significant improvements in network performance, cost efficiency, and competitive standing.
Join us as we explore how your health plan can move beyond compliance and turn transparency data into a strategic asset.
Transparency data can sometimes be viewed as limited in use due to its complexity and flaws. And healthcare leaders—already stretched for time—can struggle to allocate resources and coordinate the required efforts to utilize competitor files to their full potential. The risk, however, is suboptimal outcomes from perhaps the most valuable competitive resource available to health plans. Well-run health plans recognize that allocating resources toward competitor transparency data is a good investment, similar to the way allocating resources toward programs like risk adjustment, payment integrity, and star ratings is a good investment.
Consider the implications for a mid-sized health plan processing allowed claims of $10B annually. Every one percent improvement in network cost efficiency translates to $100M in annual savings. These savings benefit not just the payer, but also employers and members, fostering a cycle of positive financial outcomes. Health plans that leverage transparency data effectively can expect not only cost savings but also benefits like more competitive premiums, increased membership, and better allocation of fixed costs. Conversely, plans that neglect to take action risk deteriorating network performance relative to competitors.
Transparency isn't just a regulatory hurdle; it's a ripe strategic asset. By diving deep into this data, your organization can do more than just comply with legal requirements—it can secure a competitive edge. This is a call to action: Don’t be deterred by the apparent complexity of the data. Rather, see it as a challenge to be mastered and a strategic puzzle to be solved, benefiting your network and enhancing stakeholder satisfaction. Embrace this opportunity to transform a potential headwind into a robust tailwind.
"Well-run health plans recognize that allocating resources toward competitor transparency data is a good investment, similar to the way allocating resources toward programs like risk adjustment, payment integrity, and star ratings is a good investment."
The key to leveraging this data effectively is taking a bottom-up approach—specifically, putting the focus on each and every provider negotiation. By meticulously uncovering the detailed terms of competitors’ contracts in advance of every negotiation, organizations can engage in fact-based discussions rather than relying on assumptions or murky COB data. This approach enables payers to understand their competitive position and set red lines appropriately in order to negotiate away competitive disadvantage or retain the upper hand. As payers take this approach across all providers, the result is improved overall network efficiency.
In contrast, consider a top-down approach: filtering and summarizing in-network transparency files. It's not uncommon for a payer to submit many rates for any given provider and code, representing many different possible reimbursement scenarios, of which only some are likely to occur reasonably often. Managing this situation accurately requires far more than just removing "zombie" codes and assigning weights to those remaining. The largest challenge is sifting through and extracting the right rates for every code. Without appropriate software, the task is overwhelming and can easily result in failure or misinformation.
There's a better approach. Payers already have teams in place to support provider analytics and negotiations. And as negotiations approach, payers set targets and model potential reimbursement scenarios. This existing process is the ideal place to insert competitor transparency analytics. Reimbursement analysts can model not only their own terms but also the terms of competitors. The result is an accurate view of competitive standing.
Here's the takeaway for executives: consider directing your organization's focus toward supporting each and every provider negotiation, recording competitive position along the way. Over the course of a year, it is likely you will have improved your relative network performance. And your organization will also be in a far better position to benchmark your network and identify remaining strengths and weaknesses against competitors.
A bottom-up approach can sound overwhelming. But with software that makes quick work of identifying competitor terms, the task is more manageable than you might expect.
We understand that the journey toward mastering this data is both a marathon and a sprint. It requires a sharp, enduring focus and the agility to adapt swiftly to new insights. For health plan executives and those involved in health economics or provider network management, this is not just another dataset—it's a strategic asset containing highly actionable insights.
Remember, while the path to utilizing transparency data effectively may seem fraught with complexity, the potential rewards are significant. A strategic approach can unlock efficiencies and advantages that are simply not accessible to those who choose to ignore this valuable resource. As we've discussed, the benefits extend beyond mere compliance; they touch upon cost savings, lower premiums, and enhanced competitive standing—critical elements that drive the success of modern health plans.
If you find yourself looking at this intricate puzzle and wondering how to piece it together, you're not alone. Many of your peers are also on this journey, and some are further along the path, not just competing but thriving by turning transparency into strategy.
At Vairate, we specialize in making transparency simple and easy like it should be. We invite you to get in touch with us to explore how we can help you leverage transparency data to gain a competitive edge.
