Catalyst for Payment Reform

Ashok Subramanian on why unit price is still a big deal

Ashok Subramanian on why unit price is still a big deal

Suzanne Delbanco interviews Ashok Subramanian, CEO and Founder of Centivo, an alternative Third-Party Administrator (TPA) that emphasizes value-based direct contracting and utilization of high-quality providers. Prior to Centivo, Ashok founded Liazon, a private benefits exchange acquired in 2013 by Willis Towers Watson.

Suzanne and Ashok explore how employers can put downward pressure on health care prices, a critical topic given how much consolidation is happening among providers. Ashok emphasizes that unit price can’t be ignored in the pursuit of lower total cost of care. He suggests that health care purchasers aggregate volume in order to reduce costs, a key purchasing strategy in other sectors of the American economy.

In addition to describing Centivo’s method of structuring customized provider networks, Ashok provides health plan examples of programs that attempt to shift care to certain providers. Ashok highlights the obstacles large health plans face when trying to execute a curated provider network, especially when they operate in multiple lines of business.

Suzanne’s final question to Ashok explores the possibility of employers joining in groups to purchase health care together. Ashok comments that this type of purchasing is just another avenue to aggregate volume in pursuit of better deals from health care providers. He reinforces that employers are also looking to secure other capabilities from their contracted providers, like same-day access and care continuity within virtual care delivery. These additional sources of value may be as important to employers as the potential cost savings.

Ashok Subramanian leaves listeners with an empowering outlook. While a lot of purchasers may lack the confidence to have a voice in conversations with local providers, they actually have a lot more strength in these conversations than they might expect.

This interview is part of CPR’s current work to understand whether group purchasing efforts can secure better health care value for employer-purchasers. Funded by the Commonwealth Fund, CPR is assembling insights into the forces that can facilitate or hinder purchaser efforts to amass volume. Keep an eye out for more interviews on this topic.

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