Provider-Centric Cost Reduction: A Spectrum of Strategies
As a continuation of our recent article on looking beyond utilization to control costs, it’s worth highlighting that meaningful savings don’t always require sweeping overhauls or new payment models. This is especially true when thinking about the savings- strategies that begin with a provider-centric lens: recognizing that high-performing clinicians consistently deliver more appropriate care at lower total cost. From low-touch tactics to more hands-on network design, there are a range of options available to payers and network leaders ready to take action. This means taking advantage of the patterns, providers and systems that are already in place.
A Spectrum of Tactics: From Hands-Off to Hands-On
There are many ways to activate provider performance to reduce cost, each with a different level of investment and administrative complexity, let's explore a few from lowest level of intervention to highest:
Informed High-Quality Provider Choice When reliable provider performance data is available, making provider performance visible to patients, members, and navigators can shift volume with little administrative or technical overhead. This includes embedding provider quality insights in directories, surfacing high-performing providers to care navigation partners, and defaulting to top scorers for PCP auto-assignment. If you know certain providers consistently deliver better outcomes at lower cost, start by making that data known outside the walls of the conference room where it can inform member choice and provider selection.
Referral Management with Embedded Intelligence Going one step further, payers and risk-bearing organizations can implement smarter referral guidance. Using referral intelligence based on cost and quality performance, plans can encourage or even require in-network providers to send patients to high-value specialists. This preserves network integrity, lowers specialist spend, and keeps unnecessary services in check. Providers with stronger quality scores tend to order fewer unnecessary tests and procedures, so keeping referrals aligned has downstream effects. Payers can also surface this information directly to the providers, often times providers are surprised to see where their patients are ending up and they are happy to offer higher quality alternatives. This is especially true with more and more quality incentives being tied to not only an individual clinicians outcomes, but also the outcomes of the providers upstream and downstream of them.
Operational and Administrative Perks Mid-spectrum strategies reward high-value providers with non-financial incentives: faster issue resolution, dedicated support lines, or first access to pilots and initiatives. This tiered service model recognizes that high performers save the system money and deserve frictionless administrative experiences. It also builds provider loyalty and engagement.
Network Design and Benefit Alignment On the more hands-on side, health plans and network owners can design benefits to actively incentivize use of high-performing providers whether through tiered copays, differential access, or performance-tied reimbursement. This might also include network sculpting, narrowing certain specialties to top scorers or entering into value-based arrangements only with providers who meet certain quality thresholds.
It's not all or nothing. Thinking of tactics on a spectrum does not mean that the more involved strategies get ignored. It means starting with something. These strategies can often be done in parallel and while the most aggressive strategies typically have the highest ROI, they also require time and usually dedicated budget and resources. Starting with the low-hanging fruit like visibility and working up toward structural change allows plans to test what works in their own context and make progress while bigger initiatives are brewing. It also ensures that interventions match the scale of opportunity, there’s no reason to over-engineer a program if surfacing provider performance in a directory gets the job done.
Importantly, this provider-centric approach also offers an alternative to blunt cost-control tactics like prior auth or overzealous denials which are again in the spotlight and under pressure. With public and government sentiment around health plans under pressure, shifting focus to empowering high-value care is a more sustainable and more defensible path forward. It also protects members and employers, who are increasingly exposed to rising costs and frustrated by administrative complexity.
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