At the heart of this idea is intertemporal payment design—a concept now being brought to life by innovative programs like the Health Payment Account (HPA) in the commercial insurance markets, and the Medicare Prescription Payment Plan (M3P) for older adults. By leveraging time as a tool for affordability, these programs are setting a new standard for health plan design, proving that innovation doesn’t have to come at the expense of outcomes. Let’s explore how time is transforming healthcare costs for patients, payers, and providers.
The Iron Triangle of Healthcare: A Fixed Framework?
For decades, the iron triangle has framed discussions around healthcare policy and innovation. The premise is simple: improving one leg—say, expanding access—often means compromising on another, like cost or quality. This has left healthcare systems grappling with painful trade-offs, especially now as affordability remains an even more pressing concern.
But what if the triangle doesn’t have to stay fixed? What if, instead of choosing between better access, lower costs, or higher quality, we could expand the entire framework? As our CEO Brian Whorley has said, “Time itself has become a mechanism to expand access and increase affordability”—a revolutionary thought that’s challenging the status quo and gaining momentum as we move into 2025.
What Is Intertemporal Payment Design?
Intertemporal payment design shifts the way we think about healthcare payments by introducing time as a variable of choice for patients. Instead of demanding full payment for care or prescriptions at the point of service or in one bill, this approach allows costs to be spread across multiple billing cycles. For patients, this means affordability no longer hinges on what’s “in their pocket” at the moment care is needed, or even the cost itself. Everything becomes more affordable and predictable when time is introduced. Time is money, after all.
The Medicare Prescription Payment Plan exemplifies intertemporal payment design built into a government plan for the first time for the 2025 plan year. Here’s how it works:
- When Medicare beneficiaries opt in to M3P, their out-of-pocket prescription costs are covered upfront by their insurer.
- Patients can then repay these costs at the end of the month or through manageable, interest-free monthly installments over the plan year.
- This structure not only ensures patients can access medications at the time they need—it also aligns payment schedules with monthly budgets, reducing financial stress.
By incorporating time into the healthcare equation, the Medicare Prescription Payment Plan transforms a potential financial barrier into a predictable, manageable expense so that more medications end up in beneficiaries’ hands right on time.
Benefits of Using Time as a Tool for Health Plans
Time isn’t just a concept—it’s a powerful tool that solves real-world challenges in healthcare. Here’s how:
1. Improved Affordability Without Sacrificing Revenue
For patients, spreading payments over time eliminates the stress of large, immediate bills, making healthcare expenses more budget-friendly. For providers and pharmacies, it ensures timely reimbursement and financial stability across the system. Unlike traditional payment plans or loans, which often come with interest or fees, the HPA and M3P programs provide affordability without additional or hidden costs to the patient.
2. Reduced Liquidity Sensitivity
Liquidity sensitivity—when a person’s ability to pay hinges on their available cash at a given moment—is a significant barrier to care. See JPM’s valuable study on this phenomenon. This issue disproportionately affects low-income patients, who may delay or skip treatments because of cost. The bottom line: allowing payments to be distributed over time expands access to care.
3. Enhanced Medication Adherence
Patients are more likely to start and adhere to their prescribed treatments when they know costs are manageable. This not only improves individual health outcomes—it also reduces long-term costs for the healthcare system by preventing complications that arise from unmanaged chronic conditions.
Want to learn about why this matters for health plans, and how it can transform our future? Read the full blog here.
Why It Matters for Health Plans
Intertemporal payment design isn’t just a patient-focused innovation—it’s a systemic one. By addressing affordability at scale, the HPA and the Medicare Prescription Payment Plan tackle some of the most persistent challenges in healthcare, including:
- Health Disparities: Low-income populations and individuals with chronic conditions often bear the brunt of financial barriers to care. Time-based payment structures level the playing field and promote equity in a common sense way that helps them shoulder their patient responsibility.
- Earlier Diagnosis and Treatment: When patients can afford care when they need it, they’re more likely to seek care early, giving providers an earlier opportunity to intervene and reducing the risk of high-cost claims.
- Negotiating power: By relocating the receivables from the providers to the plan or a third party, health system administrative costs can be reduced and lower rates can be more easily negotiated.
As Whorely notes, “Time is the least expensive axis by which to extend affordability to patients and price certainty to providers.” This concept has the potential to revolutionize how we design health plans, making them more inclusive and effective for everyone involved.
Vision for the Future
Solutions like the Health Payment Account and the Medicare Prescription Payment Plan are blazing a trail for cost transformation in healthcare that can lead to both lower costs and better outcomes. By incorporating time as a key axis, the iron triangle of healthcare doesn’t have to mean “giving to get”—it can be accessible, affordable, and high-quality all at the same time.
As we look to the future, payment design offers a new lens for addressing systemic challenges in healthcare. From reducing health disparities to enhancing financial predictability for patients and providers, the potential applications are widespread. The Health Payment Account and the Medicare Prescription Payment Plan are just the beginning.
For thought leaders, policymakers, and innovators in the healthcare space, the message is clear: Time isn’t just an administrative cost in the system—it’s a lever to bring costs down. The question is, how will we use it to build a healthier, more equitable system that benefits more Americans?
By embracing the fourth dimension of healthcare, we have the opportunity to transform the iron triangle and make care more accessible for millions. The time for change is now—and time itself may just be the solution we’ve been waiting for.
In the coming weeks we’ll be sharing more about how time transforms the healthcare experience and outcomes for patients, providers, and payers, including employers. Subscribe to get these updates in your inbox, and share this with any colleagues who may find it interesting and helpful. Finally, if there’s a question you have or something you’d like us to cover, please reach out. I’d love to hear from you.
