How High Performance Health Care Vendors Are Getting Market Traction

Posted on Valid Points on 9/12/2019


By Brian Klepper, PhD

The health care marketplace is literally bursting with new “high performance” ventures that consistently deliver better health outcomes and/or lower cost than conventional approaches, particularly in high value niches of clinical and financial risk management.
Exciting young companies have been found and vetted that specialize in the management of advanced primary care, diabetes and other cardiometabolic disorders, musculoskeletal disorders, drug costs, cancer, high value medical claims, imaging, dialysis, reference-based pricing, bundled pricing, formation of high performance networks, allergies, sleep, captive insurance arrangements, and so on. The power of these new organizations to deliver far healthier patients for far less money is real and very compelling. High interest in projects like Validation Institute, which serves as an advocate for health benefits purchasers, validating the performance claims of vendors, and identifying vendors with consistently superior results, is evidence that this area is alive and gaining steam.
That said, it’s important to distinguish between the emergence of high performance organizations and their uptake by the market. Even if they offer better results and value, upstart providers face significant barriers to getting market traction. After decades of dominating the benefits environment, health plans and brokers have a firm grip on arrangements and are not necessarily sympathetic toward programs that lower costs if they also reduce earnings.
As a result, introductions of high performance offerings to potential clients often depend on assertive benefits advisors who genuinely seek new client value, have scanned the marketplace for top performing vendors, and are willing to guide placement of those vendors either with or without the approval and cooperation of the client’s health plan. Often, these out-of-the-box advisors have been willing to forego the commissions that bind most brokers to health plans’ interest rather than their clients’, and work for defined client fees. Talk to advisors, like David Contorno or Richard Sutton, who have taken this approach, and they’ll tell you how liberating it has been to work purely on behalf of the client.
Clients have inherent barriers to change as well. First, only those that are self-funded for their health benefits have the latitude to choose their vendors. Among those, most are cautious about health plan changes and how they might disrupt an enrollee’s experience. Most are willing to learn about and entertain new approaches, but implementing new programming is a big step.
Even so, more companies are making that leap. The cost pressures on businesses are relentless and tremendous, and there’s no indication that the legacy health plans will do anything to meaningfully alleviate the pain. In the business audiences I see, the attendees are rapt by the information they receive from the high performance vendors. They are fascinated that these solutions exist and are so powerful.
It is also not lost on them that it wasn’t their health plan sponsors who has brought these solutions to them. It was their advisor, genuinely working on their behalf.
Most important, they buy into the approaches and results that are placed in front of them. If they trust their advisor and the vendors presented have the advisor’s support, they’re eager to get started. If the vendor offers a performance guarantee – organizations like Integrated Musculoskeletal CareVera Whole HealthPriceMDs and Carrum Health do this – all parties have levels of confidence and comfort that make proceeding with an unconventional vendor far easier to accomplish.
The emergence and growing uptake of high performance vendors are the most exciting trends in health care today. A noticeable percentage of purchasers are finally willing to take reasonable steps to bet on proven new approaches, and to avoid the conventional, mediocre, or poor quality care that has dominated the system for decades. This appears to be gaining the most traction with sizable groups that have enough leverage to act independently of health plan wishes, but many benefits advisors, in an attempt to be relevant, are bringing their clients along as well. There’s no question that the legacy players still dominate, but it’s clear that a new paradigm of high performance is established and firmly rooted, with accelerating growth.
Which means that health care’s future now seems more promising than most of us have thought.
Brian Klepper is a health care analyst and Executive Vice President of Validation Institute.

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