Could the answer to misaligned payer incentives be a futures market for health interventions?

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

Called Nobil, the company aims to align incentives across payers by creating a mechanism that will enable them to realize value and returns from investments in long-term health interventions. Founded as a B corporation in April, Nobil plans to launch in market in the first quarter of 2022.

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

This can create a chilling effect with payers hesitating to invest in long-term interventions, a conundrum that Nobil aims to tackle. Schmidt, who previously led Solera Health as CEO, created the company along with Elizabeth Dreicer, who also serves as co-founder and CEO of KUITY, a provider of advanced analytics and artificial intelligence products. Nobil has headquarters 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 the duration of member coverage, Schmidt said.

Typically, payers are not incentivized to invest in health interventions that take longer to have an impact than the coverage duration of a member’s plan, she explained. So, payers are looking for a quick return — an improvement in health measures and consequent cost savings — usually in a 12-to 24-month span. But it takes far longer than that to see the effects of some interventions that can significantly contribute to people’s health, like gene therapy for example.

Nobil’s first target will insurers providing Medicaid plans, but the model really applies to any risk-bearing entity that is not incentivized to make investments in interventions with long-term returns, Schmidt said. This includes commercial as well as self-insured employers.

When payers join Nobil, they enter into a giant risk pool and investment machine. They pay into the market and then decide what type of intervention they are going to implement based on the needs of the members they serve in a particular market. Nobil also works with the payer to determine the intervention that is likely to have the greatest impact.

“We [then] manage the market value of the health interventions over time,” Schmidt said. “We track the investment and attribution by payer and individual, and then we fractionalize 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 that moves with them as they switch from payer to payer. The record includes eligibility files, claims data and cost data. It tracks the intervention and related costs over time, Schmidt said.

This allows the company to determine which interventions are actually effective and enables it to manage cost savings as a result of changes in health outcomes.

“We’re translating [the outcomes] into a monetary unit, [which] we’re calling a health value unit — and so think of us as trading health value units across payers over time,” she said. “And the business model is to take transaction or trading fees.”

“So, if an intervention is saving $100, we’re going to keep a percentage of that…and redistribute the remaining value across the payers that invested in that intervention,” she added.

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

“It’s a big idea,” Schmidt said. “We’re trying to say — how do you actually think about these investments [in health interventions] as securities or annuities and not expenses. As we started to look at social determinants of health, and chronic disease prevention, maternal care, transplant, there are all these examples of things that have this huge opportunity to improve people’s health, but payers really don’t have any incentive to invest in those interventions.”

Whether the big idea will pan out remains to be seen. But Nobil is determined to change the way payers think about health interventions, she added.

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

Photo: doyata, Getty Images

 

 


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