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Why a joint venture between a payer and provider can create a radically different member health experience

May 8, 2018 - A patient's journey through the American healthcare system is difficult to map. However, there is one experience most patients will certainly face: a disconnected and often oppositional relationship between their health insurer and provider.  

Positive consumer sentiment is as important to payers and providers as it is to other kinds of businesses. A 2017 PwC survey found 78 percent of respondents make their healthcare choices based on experience, compared to 75 percent who said the same about banking and 74 percent who said the same about restaurants.

But healthcare isn't like airline and banking businesses. It is hyper local and dependent on intricate networks and contracts. It is inarguably easier for a dissatisfied consumer to choose a new airline carrier or sandwich shop than it is to switch health insurance plans or providers. For payers and providers to transform the complicated healthcare experience of consumers in a mutually beneficial way, they must cooperate over a shared goal.

Member experience: The undeniable link between health insurers and providers

Health insurers and providers share a common objective: provide a seamless healthcare  experience for members and patients. From a patient's registration at a clinic or hospital to medical treatment to final payment for healthcare services, improving the consumer experience has never been more important than it is today.

"No one in healthcare today can say consumers have a great experience when it comes to the American healthcare system. Not a single one of us is proud of that," Brigitte Nettesheim, President of Transformative Markets at Aetna, told attendees during an April 13 executive roundtable discussion at Becker's Hospital Review's 9th Annual Meeting in Chicago. "Today's inefficient relationship between payers and providers leaves consumers in a maze from which they sometimes feel they can't escape."

Chief among pain points that providers and payers identified in their relationship are redundant information, denied claims and inconsistent rules, according to a recent Availity survey. Availity's report, which surveyed 40 health plans and 400 practice- and facility-based providers, also found 53 percent of payers "strongly agree" providers and health plans need to collaborate to be profitable.  

Aligned operations through payer-provider joint ventures

Payers and providers need to coordinate processes in order to radically change and improve the healthcare system.

Aligning healthcare payers and providers requires that each evolve from its historic role. Insurers must transition away from a sometimes-reactive entity that only gets involved after a patient receives treatment to a more proactive one that promotes holistic health; while providers must focus their operations more on the care continuum.

A joint venture health plan — a company formed by a provider and health insurer that offers co-branded policies with shared risk — is a distinctly different engagement model. Separate equity payer-provider JVs meld both institutions' expertise and are gaining traction: Since 2013, payers and providers have formed 11 JV health plans, according to Health Affairs. Aetna offers five of those plans across the U.S. In addition, two others have been reported by Becker's Hospital Review but not featured on the Health Affairs list, bringing the total to 13.

"JV health plans are about how we work together across the industry to create an improved experience," Ms. Nettesheim said. They are also a safer bet for providers thinking about starting their own health plan. Payers and providers contribute equal amounts of capital to the JV health plan and share governance. The health system often takes on care management responsibilities, while the insurer provides the administrative structure to support product design, underwriting, enrollment and claims processing, according to Health Affairs.

Aetna's five JV plans make it the most active among other commercial insurers in the space. To date, Aetna collaborates with leading providers in five markets across the U.S.: Minneapolis-based Allina Health I Aetna; Phoenix-based Banner I Aetna; Sacramento, Calif.-based Sutter Health I Aetna; Arlington-based Texas Health I Aetna; and Falls Church, Va.-based Innovation Health (formed with Inova Health).

Innovation Health: A case study

In 2012, Inova Health System and Aetna collaborated on an exclusive partnership to establish Innovation Health, a jointly owned health plan serving northern Virginia.

The JV allowed Aetna to "meet providers where they were in their journeys and build sustainable collaborations," Ms. Nettesheim said. The JV combined Inova's extensive local network of  physicians, integrated EHR and care management expertise with Aetna's rich claims data, consumer-centric digital technology and insurance experience.

"We learned to give up control of our pocket programs and work together, because that's what's best for the consumer," Ms. Nettesheim said. "As a board member for Aetna's five joint ventures, I can tell you, some very uncomfortable conversations take place. But they're the right conversations to have. If we are not having uncomfortable conversations every day, we're not changing."

Innovation Health did not simply establish a different patient experience for members, but a better one. Innovation Health members' emergency department visits fell 9 percent between 2015 and 2017. Members also experienced a 6 percent increase in generic prescribing, and a 31 percent decrease in C-section admission.

"With Innovation Health, we worked together with a clinically integrated network for two years on decreasing C-sections," Ms. Nettesheim said. "We had to talk about how to bring all of our resources to bear. And behavior started to change. We were able to provide meaningful information to the provider."

Conclusion: A world-class member experience is possible

Payer and providers in joint venture relationships are striving for the day when their members and patients have simpler, better healthcare experiences that help them reach their health goals.

It's not a vision anymore. Demand for an excellent member healthcare experience is here. Attentive payers and providers are fulfilling the need with innovative and mutually beneficial solutions like provider-payer joint ventures. These JVs are transforming the complicated healthcare experience into a journey toward a simple shared goal: a satisfied member.

Now that’s innovation

Innovation Health is transforming the health care journey. Through innovative programs, coordinated care, and remarkable access, our health plans are personalized to fit our members’ needs. Discover how we are helping members achieve their health ambitions right in their community.

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Health benefits and health insurance plans are offered and/or underwritten by Innovation Health Insurance Company and Innovation Health Plan, Inc. Innovation Health Insurance Company and Innovation Health Plan, Inc. are affiliates of Aetna Life Insurance Company and its affiliates (Aetna). Aetna provides certain management services to Innovation Health. Each insurer has sole financial responsibility for its own products. Aetna and CVS Pharmacy®, Inc., which owns CVS® HealthHUB™ locations, and MinuteClinic®, LLC (which either operates or provides certain management support services to MinuteClinic-branded walk-in clinics) are part of the CVS Health® family of companies. 

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