Managed Care Can Improve Relations with Providers

Les Masterson, for HCPro, Inc., March 19, 2008

No industry wants to be called inflexible, incompetent, arrogant, greedy, unresponsive, pushy, unethical, or careless, but that's how hospitals and physician groups described managed care companies in a recent survey.

Davies Public Affairs, a communication firm based in California, recently released its 2008 National Payor Survey, which asked 113 top healthcare provider organizations that represent 500 hospitals about payer negotiating behavior, business practices, and personal interaction. Hospitals leaders from 44 states and Washington, DC, who are responsible for negotiating contracts with major health plans, completed the survey during April and May 2007.

The results released this month are not pretty. Of the six large health plans featured in the survey, the managed care company hit hardest was UnitedHealthcare. A whopping 91 percent of those surveyed have an "unfavorable" view of UnitedHealthcare. When respondents were asked to choose which word or two best describe the Minneapolis-based payer in its dealings with hospitals and physician groups, 14 percent used the word "negative." The rest of the top five words were "difficult," "rigid/inflexible," "incompetent," and "arrogant."

The top issues hospitals and physician groups have with UnitedHealthcare are contract negotiations, fixing claims, processing/paying claims, and honesty and candor. Sixty-four percent of respondents remarked that UnitedHealthcare was the most difficult to negotiate with, pays the worst reimbursement rates, and has the worst reputation for dealing with critical hospital issues.

Though the highest percentage of respondents took aim at UnitedHealthcare, the company was not the only one bashed by hospitals and physician groups. Forty-eight percent of respondents rate WellPoint/Anthem unfavorably and 47 percent view CIGNA unfavorably.

The Davies survey was largely negative, but one managed care company that received mostly positive results was on the receiving end of negative publicity and dissatisfied providers not long ago. Aetna (57% favorable/37% unfavorable) has turned around providers by changing leadership and addressing provider concerns.

Altering a company's culture and dealings with clients are not easy, but, as Aetna showed, it is possible.

Brandon Edwards, the head of Davies' healthcare division, says providers would prefer better relationships with payers. Providers "want legitimate, honest P4P programs, data exchange, streamlined business processes, and clarity. Those things are achievable if all parties really want the same thing--access to quality healthcare at reasonable rates, delivered as cost-effectively and efficiently as possible," says Edwards.

So, how can health plans improve provider relations? I spoke to one of the leading advocates for payer-provider collaboration, Emad Rizk, MD, president of McKesson Health Solutions, which was not reviewed by respondents in the Davies survey. Rizk says McKesson has created a collegial relationship by reaching out to providers. In the state of Illinois, for instance, McKesson approached 10-15 top hospitals to forge better working relationships. "We're not going to do it without you and you're not going to be able to do it without us," Rizk says McKesson told the hospitals.

Rizk gives seven tactical steps for payers to improve provider relationships:

  1. Pick a geographic area of density where the payer can have a significant impact on physicians and providers, such as if a managed care company covers more than 15% of the patient population in a region.
  2. Identify a specific disease or specific population that you want to manage.
  3. Identify the physicians and hospitals that you want to target.
  4. Outline the clinical processes that both the payer and provider can agree upon.
  5. Outline the outcomes that you want to achieve in a specific timeframe.
  6. Outline the financial incentives that you are going to give providers.
  7. Agree on how often you will share data with them.

Many in the industry view the Davies survey as a negative, but rather than bash the findings, managed care companies should use the results to improve relationships with providers.

It doesn't serve anyone (most especially the patient) to continue this bad blood.

Les Masterson is senior editor of managed care with HCPro, Inc. He may be reached at
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