Fee-for-Value as a Vehicle for Payer Differentiation

Rich Bajner, James Smith, Kai Tsai, and Eric Meinkow

Changing regulatory requirements, disruptive payer market entries, and shifting provider landscapes all challenge payers in the pursuit of offering a differentiated and successful product. One vehicle to stave off these challenges and drive market penetration is the use of fee-for-value (FFV) arrangements to create meaningful provider partnerships and networks, upon which to build differentiated products.

FFV is an evolved form of payment for healthcare services, whereby payers and providers develop long-term, mutually beneficial partnerships at multiple organizational levels to coordinate high-quality care delivery. While not every FFV arrangement is built on a mutually agreed upon or designed set of win-win parameters, the majority of successful FFV arrangements are developed in coordination, rather than dictation.

FFV Image

Despite continued efforts by payers and providers to explore FFV arrangements, there remain several critical imperatives payers must consider when moving forward with FFV models to create a positive environment for provider partners:

  1. The Journey: Reinforce the partnership aspect of the FFV arrangement by meeting providers on their journey toward risk.
  2. The Means to Operationalize: Ensure your organization is operationally prepared to administer the FFV arrangement. 
  3. The Means to Support Provider Partners: Ensure your organization can provide operational support to provider partners to drive mutual success.

If addressed, payers and providers are positioned to truly differentiate themselves in the market, drive market share, and create an environment for high-quality care and financial stability.

Download: Fee-For-Value as a Vehicle for payer differentiation

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