Could the response to misaligned payers’ incentives be a futures market for health interventions?

As the healthcare industry continues on its path to value-based care, the question of how to effectively align stakeholder incentives remains. A new business will attempt to tackle this problem in a fairly unique way.

Called Nobil, the company aims to align incentives between payers by creating a mechanism that will allow them to realize value and returns on investment in long-term health interventions. Founded as Company B in April, Nobil plans to enter the market in the first quarter of 2022.

The company’s goal is to solve the “bad pocket problem,” said Brenda Schmidt, co-founder of Nobil, in a telephone interview. This happens when a payer invests in a member’s health, only to see the individual change jobs and find coverage with another health insurance company. The new payer then reaps the benefits of having a member who has improved their health outcomes as a result of the initial intervention.

This can create a chilling effect, with payers reluctant to invest in long-term interventions, a conundrum that Nobil intends to tackle. Schmidt, who previously ran Solera Health as CEO, started the company with Elizabeth Dreicer, who is also the co-founder and CEO of KUITY, a provider of advanced analytics and artificial intelligence products. Nobil is headquartered in Phoenix and San Diego.

But how exactly will their proposed mechanism work?

Essentially, Nobil will create a healthcare futures market that invests in interventions with the greatest impact, regardless of how long members are covered, Schmidt said.

Typically, payers have no incentive to invest in health interventions that take longer to have an impact than the length of coverage of a member’s plan, she explained. Thus, payers are looking for a quick return – improved health measures and consequent cost savings – typically over a period of 12 to 24 months. But it takes much longer than that to see the effects of certain interventions that can contribute significantly to the health of people, like gene therapy for example.

Nobil’s first target will be insurers offering Medicaid plans, but the model really applies to any risky entity that has no incentive to invest in interventions with long-term returns, Schmidt said. This includes commercial employers as well as self-insured employers.

When payers join Nobil, they enter a giant risk pool and investment machine. They contribute to the market and then decide on the type of intervention they will implement based on the needs of the members they serve in a particular market. Nobil also works with the payer to determine which intervention is likely to have the most impact.

“We [then] manage the market value of health interventions over time, ”Schmidt said. “We track the investment and attribution by payer and individual, then we split the credit for that investment, and then we pay dividends to market participants.”

To track the investment, the company will create a health value record for each member who travels with them as they move from payer to payer. The record includes eligibility files, claims data and cost data. It tracks the intervention and the associated costs over time, Schmidt said.

This allows the company to determine which interventions are truly effective and to manage the cost savings resulting from changing health outcomes.

“We translate [the outcomes] in a monetary unit, [which] we call a unit of health value – and therefore think of us as exchanging units of health value between payers over time, ”she said. “And the business model is to take transaction or negotiation fees.”

“So if an intervention saves $ 100, we’ll keep a percentage of that… and redistribute the remaining value among the payers who invested in that intervention,” she added.

For example, if a payer invests in a type of gene therapy for a member who is curing a particular disease and that member leaves the payer in a few years and joins a new payer, the health value record will allow Nobil to calculate the investment savings. initial in gene therapy created. Then, Nobil can reimburse the first payer for the investment made because of the savings it has created for the other payers over time.

“It’s a great idea,” Schmidt said. “We’re trying to say: what do you really think about these investments? [in health interventions] in securities or in annuities and not in expenses. As we begin to look at the social determinants of health, chronic disease prevention, maternal care, transplantation, there are all of these examples of things that have this huge opportunity to improve people’s health, but the payers really have no incentive to invest in these interventions.

It remains to be seen whether the big idea will materialize. But Nobil is determined to change the way payors view health interventions, she added.

This model is also based on the assumption that the healthcare industry will not see the changes many are asking for in the form of a single-payer system like Medicare for All. After all, if there is only one payer, no interest alignment is necessary.

Photo: doyata, Getty Images

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