Nurses are the compassionate glue that keeps healthcare together. As anyone who has spent time in the hospital (either as a patient or a worried family member), the nurse always provides the compassion, hourly reassurance, and consistency that makes healthcare almost bearable. Nurses bring a personal connection to the patient and a passion for care unrivaled in the profession. Every successful nurse I know is a type-a-driven personality and a loud, vocal, and strong advocate for their patient. Nurses are a necessary role in giving the patient a voice in the clinical setting. And financially speaking, nurses cost less and arguably provide a greater return on investment than MDs in the clinical setting.

That is why it is so striking that a major healthcare player would allow this critical frontline resource to get so upset, and what does the massive strike by KP nurses say about network health? A lot. Suppose health plans are crying poverty when it comes to keeping pace with the economic demands of nurses. In that case, that same resource constriction is flowing toward specialty and ancillary care. Over the next year or two, outsourced, third-party managed networks are going to be pinched as health plans put a greater focus on cost control.

The health plan argument will be simple and effective: prove your value (i.e., better outcomes evidenced by clinical data) or cut your costs. This movement will bind third-party management groups like Tivity and ASH as they struggle to collect and then surrender patient outcomes data to prove their worth and cost. Once payers see that only a fraction of members access these modalities, the logical move will be to demand a steep price reduction in the common per-employee / per-month (PE/PM)fee structure. This reduction in fees will translate into continued restriction of reimbursement fees paid to providers.

The only way to compete in this scenario is to completely disrupt it. Providers and payers need to work collaboratively to remove the third-party network managers from the equation. Payers and providers need to develop relationships where reimbursement is set according to outcomes and patient data is shared. Payers need to take the lead role in the management of networks by demanding quality metrics, and providers need to put skin in the game by moving away from the ‘fee for service’ model.

The current system is broken. Third-party network management groups exist by charging exorbitant fees to payers and paying low wages to providers. This system is only maintained if payers and providers fail to see the inherent conflict of interest. Zula Health is designed to bring payers and providers together by removing the third-party network management system and replacing it with a novel ‘in-sourcing’ model that facilitates collaboration on the essential elements of healthcare: quality, outcomes, and cost.