Examples of Health Insurance Value Chain

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The health care value chain consists of various links which range from the individual patient to a health insurance provider. The value chain includes all of the services, products and options that are available within a health care plan. This includes the costs that are paid as the result of certain services and products that are provided to a payer or patient. The health care value chain has various elements that link payers to the producers of a product or service.

Payers of Services

  • One link in the health care value chain are the payers of services. Payers typically include the individuals. These groups of people pay fees in the form of a deductible or copays for a product or services. The payer is typically billed for these costs from a particular service intermediary or service provider such as an insurer or physician.

Service Intermediaries

  • Service intermediaries are another link in the health value chain which includes an insurer, health maintenance organizations and preferred provider organizations. These service intermediaries set the costs and are the ones who determine the cost structure for various types of health plans. These plans are then offered at various costs and types to payers in the health care value chain.

Service Providers

  • The link in the health care value chain that provides the service to the payers are service providers such as hospitals, physicians and pharmacies. The service provider may also be a member of a specific service intermediary. These service providers are accepting a lower fee for their participation in specific organizations or health care plans. Some health care plans may provide a benefit such as savings on the purchase of prescription drugs.

Purchasers

  • The purchaser link in the health care value chain is the group or organization that is buying a product from a producer in bulk quantities. A purchaser typically includes wholesalers, mail-order distributors and group purchasing organizations. Purchasers are buying a product from a supplier or manufacturer such as surgical supplies or medical devices. These products come from producers which are the last link in the health care value chain.

Producers

  • A producer is typically a drug manufacturer, a medical device manufacturer or a manufacturer of medical-surgical devices. These manufacturers make or develop the products which are then sold to purchasers who then supply them to service providers. The producer typically has representatives that meet with service providers to promote new types of products such as new drugs or the latest medical devices.

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