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Payers as Customers: Plans and Tech Execs Dissect New Business Models

Analysis  |  By Laura Beerman  
   September 27, 2022

"The ability to access multiple care modalities through a single vendor is extremely attractive to plans," says one health tech leader.

Payers are included in three of the five business models that digital health companies need to build and scale, according to McKinsey—whether the focus is health plans, employers, or new products like digital therapeutics.

HealthLeaders asked multiple health plans and tech companies about why today, the payer is a new kind of customer and how that impacts purchasing decisions, scale, and value delivery.

The executive soundbites below include a behind-the-scenes discussion from HealthLeaders' recent roundtable. The event report, A One-Of-A-Kind Discussion On Healthcare's Platform-Industrial Complex, is available as a free download.

Making purchasing decisions

Buy versus build is just one aspect of payer tech decision-making. Once a payer decides to partner, their digital health offerings must deliver on multiple aspects of ROI.

Debra Williams, chief sales and marketing officer for BlueCross BlueShield of Massachusetts, told HealthLeaders: "There are two lanes by which health plans will evaluate these offerings: insured and self-insured targets. For the former, plans need the health tech to show ROI—whether that's bending cost trend, increasing access, connecting dots for the consumer, or helping with better health outcomes. For self-insured clients, health techs need to help them with all of the above and support their war on talent."

Katie DiPerna Cook, senior vice president of Partnerships for Headspace Health, agrees. Headspace Health uses science-backed tools to support meditation, sleep, stress, and mindfulness.

"Health plans understand that ROI won't happen overnight and that a long-term investment in mental health and well-being can greatly impact the total cost of care and outcomes over time … And while the health plan business can have a longer sales cycle, health tech companies need to be able to demonstrate immediate value to the plan and their members through initial sign-ups, greater engagement, and clinical outcomes."

Exclusive excerpt: HealthLeaders Platforms Roundtable

The following is a behind-the-scenes, real-time section of HealthLeaders' recent platforms roundtable, focused on the vendor-to-payer pitch and capabilities demonstration.

Jesse Horowitz, chief product officer, Oscar Health: "One thing that may not be new but that we're certainly seeing a lot of is this idea of pilot and try before you buy. I don't think it's new, but a continuation. A prospect journey might start with an executive level alignment, but then you start having business unit owners who say no way. It's almost the hunt for the thing that won't work. Why is the executive desire not matching the team leader desire?"

Alex Zavgorodni, VP of enterprise architecture, Healthfirst: "If you want to know if a new investment will work, the fastest way to answer that question is to do a proof of concept [POC]—especially if you're really zeroing in on time-to-value."

Leah Silver, director of business solutions, Zelis: "The decision-making process from a partner perspective is now longer and more complex. We're going into deep due diligence and nearly implementation during a sales process as an advanced demonstration of our capabilities. There are also multiple stakeholders."

Zavgorodni: "The thing that's always been more challenging is the human dynamic and navigating decisions. Being able to have those discussions is more of an art than science but it needs to be had."

Achieving scale

"Payers hold the key to unlock scale," notes Aaron Gani, founder and CEO of BehaVR, a digital therapeutics (DTx) company applying "the neurological power of VR" to curb anxiety disorders and chronic disease at scale. 

"In a D2C model, you need to convince one person at a time that your solution is effective, safe, and affordable. Just getting their attention can be incredibly costly. Working with organizations that have a financial stake in member or employee health can streamline that process. Health plans aren't going to promote or reimburse for something that's not proven or trusted."

Williams agrees: "When you put yourself in the shoes of the health techs, it's much better to sell in bulk versus try to get share of wallet from consumers one by one."

As an example, she cites Hinge, which offers virtual physical therapy for musculoskeletal conditions such as back and joint pain. Hinge understands this as well. BCBS-MA is one of the many health plans and vendors that form the "ecosystem relationships" that Hinge uses to tout its advantages to employers including a simple contracting process, established data and billing integrations.

Delivering value

For tech vendors to link into the payer value chain, they must address workflows, reimbursement, and long-term health and economic outcomes to name a few.

Melissa Sherry, vice president of social care integration for Unite Us, notes: "For payers, you must understand their unique priorities—things like benefit design and understanding business requirements at the individual and population health levels. Payers don't want to have to drastically change how they work today or make their reporting more difficult; however, it is also important that they do not medicalize community-based organizations in an effort to use existing systems."

Buy versus build decisions have a direct impact on results, including how long it takes for value capture.

Says Gani: "Payers are looking for companies that can do more than just one thing. Vendors need to meet a range of needs, rather than just point solutions, to help payers streamline their own evaluation and purchasing processes, but also potentially to meet a range of co-morbidities within individual members."

DiPerna Cook adds: "Plans like Cigna, and Blue Shield of California, among others, come to us as a digital mental health provider because of our comprehensive solutions. The ability to access multiple care modalities through a single vendor is extremely attractive to plans … There's immense value in being able to provide step-care to plan members, triaging a member up to a higher level of care or down as needed based on need." 

Choosing and pivoting the best business model

As McKinsey writes, health tech companies must have the right business model to address customer need.

A vendor's business model must often be as agile as the product itself so roadblocks to implementation can be overcome with strategic pivots. With payers at the core of multiple business models, it has never been more important for health tech companies to understand how health insurers and employers make product decisions.

“When you put yourself in the shoes of the health techs, it's much better to sell in bulk versus try to get share of wallet from consumers one by one.”

Laura Beerman is a contributing writer for HealthLeaders.


Health plans and employers have long been purchasers of technology, but today seems different.

The explosion of health tech companies offering point and platform solutions have made payers a new kind of customer.

Vendor partners must deliver during the purchasing, implementation, and growth stages to achieve their place in the payer value chain.

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