Getting to a Value-Based Contract with A Major Payor
I outline how to find product-market fit with traditional payors.
Before I was the least favorite TikTok reporter for internal teams at UnitedHealth Group, and at the same time a relentless advocate for human dignity of those working at UnitedHealth Group, I was a counterparty to negations for over a year and a half with leadership at UnitedHealth Group. I learned a lot! I’ve also had productive relationships with a number of other payers, and I value any time innovators inside large organization chose to spend on something new. None of this is easy, and we need visionary leaders for healthcare.
This article summarizes what I learned over the course of my conversations over many years with individuals who work or worked at major payors. I hope my colleagues who are building innovative solutions to real healthcare problems will find the following useful. It’s not much of a general audiences article, I grant you. It’s about how to get to a value based contract in behavioral healthcare.
Finding the elusive product-market fit in any business? It matters. It's not obvious what it should look like in healthcare, particularly when you're trying to sell something to major third-party payers. Getting to Value-Based contracts in behavioral health has been elusive, much less valuable care. Andreessen Horowitz has a guide. It is well beyond the assertion that “this will obviously save money!”
What follows is an article based on what insiders have told me. This, reportedly, is what they're looking for, across a number of major payors. I would love to see more value-based care with actual value existing in the world!1
I don't actually think building for the sole purpose of pleasing Big Health is a great idea, but plenty of investors think this is a good plan. It gets companies to scale, after all. I prefer to work with bespoke aligned payers with aligned incentives in keeping with my delicate sensibilities… I’m also not fabulously wealthy from creating a wildly successful health company at scale, so what do I know?
What follows is a list of capabilities. They are of interest to Big Health payers doing Value Based contracting (in mental health). Now, payers don't expect any program to have all of these things. But the answer is probably not none of them, either.
It is, I hope, helpful to understand the scope of things they're actually interested in. Y’all, dear readers, can compare the scope of what they're interested in with the scope of work done by flashy venture-backed companies—maybe even yours! It’s as if Santa had a really demanding Nice list! It is not AI-generated, but it is in bullet points.
Member Identification and Risk Stratification:
Screen high-opportunity populations using virtual, on-demand, healthcare and community settings, and EHR integration.
Store screening and clinical and social data in a central repository for risk stratification refinement.
Utilize data for risk stratification and identifying rising risk populations to anticipate trends.
Alert the care team when a patient shows high potential for program benefits.