Value-Based Care
I've sat on both sides of the payer-provider negotiating table.
On the provider side, I've watched talented clinical teams build genuinely innovative care models — and then watch those models get squeezed, delayed, or killed by contract terms that seemed designed to protect the payer from any possible downside.
On the payer side, I've watched network development teams try to build value-based arrangements with provider organizations that had no infrastructure to support them, no data to measure them, and no real interest in the shared risk that value-based care requires.
Both sides have a version of the other that is mostly caricature. And both sides have built their strategies around that caricature.
That's the problem. And it's a choice.
The conventional wisdom in healthcare is that payers and providers are structurally opposed. Payers want to pay less. Providers want to be paid more. The negotiation is zero-sum, and the relationship is fundamentally transactional.
There's enough truth in that to make it feel like a law of nature. But it isn't.
The adversarial dynamic is a product of specific incentive structures, specific information asymmetries, and specific historical patterns that have calcified into assumptions. It persists not because it's inevitable but because both sides have organized themselves around it.
Payers have built network development teams whose primary skill is contract negotiation. Providers have built managed care departments whose primary skill is contract negotiation. Both sides have lawyers, both sides have rate benchmarks, and both sides approach the table expecting a fight.
When you expect a fight, you get a fight. And then you conclude that fights are inevitable.
One of the least-discussed drivers of the adversarial dynamic is information asymmetry — and it runs in both directions.
Payers have claims data that providers don't have access to. They can see utilization patterns, cost trends, and quality gaps across their entire network. Providers often don't know how their performance compares to peers, which makes it nearly impossible to have a data-driven conversation about value.
Providers have clinical context that payers don't have access to. They understand why certain patients are high-utilizers, what social factors are driving readmissions, and what care model changes would actually move the needle. Payers often don't have that context, which makes it easy to misread utilization data as inefficiency when it's actually complexity.
Both sides are making decisions with incomplete information. Both sides are filling the gaps with assumptions. And the assumptions are almost always adversarial.
The organizations that have broken out of this dynamic have done it by sharing information — not as a negotiating tactic, but as a genuine operating principle. Joint data reviews. Shared quality dashboards. Regular operational meetings that aren't about contract terms.
It sounds simple. It's surprisingly rare.
Here's the paradox at the center of the payer-provider relationship: value-based care requires genuine partnership to work, but the process of getting to a value-based contract is almost always adversarial.
You negotiate a shared savings arrangement through the same process you'd use to negotiate a fee-for-service rate. Lawyers review the contract language. Finance models the downside risk. Network development pushes for terms that protect the payer. The provider pushes back. Eventually, something gets signed.
And then you're supposed to be partners.
The contract negotiation process actively undermines the relationship that the contract is supposed to enable. By the time the ink is dry, both sides have spent months in an adversarial posture. The trust required for genuine partnership has been eroded before the partnership has even begun.
I've seen this play out enough times to believe it's not a coincidence. It's a structural problem. The process produces the dynamic.
The payer-provider relationships that actually work — the ones that produce meaningful quality improvement and sustainable cost reduction — share a few characteristics that are worth naming.
They start with alignment on the problem, not the contract. Before anyone talks about rates or risk corridors, the best arrangements begin with a shared diagnosis: what is the specific population challenge we are trying to solve? What does success look like? How will we know if we're making progress?
They invest in the relationship infrastructure. Joint operating committees. Shared data environments. Regular clinical and operational reviews that are separate from contract negotiations. The relationship has a structure that isn't just the contract.
They treat the contract as a lagging indicator. The contract documents what the relationship has already agreed to. It's not the primary vehicle for building alignment — it's the record of alignment that already exists.
And they have executive sponsorship on both sides. Not just network development and managed care. Actual executives who have made the relationship a priority and who are willing to intervene when the operational teams get stuck.
None of this is revolutionary. All of it requires a decision to do things differently than the default.
I said at the outset that the adversarial dynamic is a choice. I want to be precise about what I mean.
I don't mean it's easy to choose differently. The incentive structures are real. The historical patterns are real. The lawyers and the rate benchmarks and the zero-sum negotiating posture are all real.
What I mean is that the dynamic persists because both sides keep choosing to organize around it. And both sides have the capacity to choose differently.
The payers that have built genuinely collaborative provider relationships didn't do it by finding unusually cooperative providers. They did it by changing how they approached the relationship — what they shared, what they asked for, what they were willing to put at risk.
The providers that have built genuinely collaborative payer relationships didn't do it by finding unusually generous payers. They did it by showing up differently — with data, with operational credibility, with a willingness to take on risk they could actually manage.
The adversarial dynamic is a choice. The alternative is also a choice. The organizations that figure that out first will have a significant advantage over those that don't.
"Value-based care requires genuine partnership to work, but the process of getting to a value-based contract is almost always adversarial."
About the author
Alex Yarijanian is a healthcare strategist, founder, and speaker. He writes about leadership, systems, and the gap between how organizations say they work and how they actually do.