Understanding HMP Global Market Access Insights' New Payer Report Series

Greetings From San Mateo!

Welcome to the March edition of our Monthly Insight Series. This month we review several highlights from our December 2021 Special Topic Report on Payers.

Why Payers? The insurance marketplace has become increasingly consolidated, and companies are looking for new avenues for growth. Large, horizontal mergers reached a standstill when the Cigna + Anthem merger was blocked by a U.S. district court resulting in a termination of the agreement. Payers are now focusing on vertical integration, and blurring the lines between insurer, PBM, SP, and Provider.

Payers are, in some cases, now acting as "virtual IDNs" enabling them to manage the initial referral and capture downstream revenues (see below).

Grappling With the (Payer) Octopus 

We see several trends continuing to accelerate in this "Vertical Era": 

1. Payers and Providers will increasingly compete to control patients. Expect provider consolidation as competition weeds out the weak. Monitor payer expansion from "easy" opportunities such as senior care into high-cost and high-complexity areas including oncology. 

2. "Virtual First" plans become commonplace. Payers save money by asking patients to initiate care using a phone or video encounter. Patients are then directed to the insurers' preferred providers for subsequent care, subject to strict prescribing controls. These narrow specialty networks increase plans' influence on treatment selection.

3. Manufacturers will need to track their relationships and financial arrangements across an entire vertical payer organization. Vertical payers will inevitably have internal conflicts as priorities among subsidiaries vary, most likely between an insurer’s search for low total cost of care and a PBM’s search for rebates, admin, and data fees. Manufacturers should assess each vertical payer’s level of integration and adapt their commercial interactions to optimize their results across the entire payer vertical.

If you like what you see, stay tuned! We are planning to release a payer podcast this April. As always, please reach out with any questions or comments you may have.

All the best...
-- HMP Market Access Insights Team