Simplifying Payer Operations and Strengthening Provider Relationships

Summary

Becker’s Healthcare Podcast: “Simplifying Payer Operations and Strengthening Provider Relationships”
Guest: Sharon Williams, CEO, University of Michigan Health Plan
Host: Scott King
Date: February 2, 2026

---

Episode Overview

This episode of Becker’s Healthcare Podcast features a deep dive into the evolving dynamics between healthcare payers and providers amid industry-wide cost pressures and workforce shortages. Sharon Williams, CEO of University of Michigan Health Plan and experienced consultant, shares her insights on current operational challenges, opportunities for innovation (especially regarding AI), and bold recommendations for regulatory and industry change to improve healthcare affordability and access.

---

Key Discussion Points & Insights

1. Sharon Williams’ Background and Approach

• Experience: 30 years in healthcare, spanning roles with “the Blues,” consulting for both payers and providers, and advising state/federal agencies and digital health companies (01:01).
• Perspective: “I feel like I've touched almost every facet of the healthcare industry in the U.S.” – Sharon Williams (01:21).

---

2. Provider Relationships amid Cost Pressures and Workforce Shortages

• Proactive Communication:
  • University of Michigan Health Plan emphasizes over-communicating with providers, preferring direct phone conversations with office managers over mass emails (01:42-02:20).
  • Sharon notes, “Some of these conversations can get a little contentious, and we're working specifically to keep it civil, keep it respectful...” (02:26).
• Shared Challenges:
  • Both payers and providers struggle with financial pressures and difficulty recruiting quality staff.
• Creativity Out of Necessity:
  • Health organizations are developing new training programs and career pipelines, such as internships and fellowships, to address workforce gaps.
  • Sharon observes, "It's pushing a level of creativity that I think is unparalleled." (03:20)

---

3. Gaps Between Payer Strategy and Operational Execution

• Manual Processes:
  • “My God, do we love a spreadsheet and a fax machine!” – Sharon Williams (03:55).
  • Healthcare lags behind other industries in automation and tech adoption.
• Need for AI:
  • AI is essential but underutilized due to outdated processes and siloed solutions.
  • “We are an industry in need of AI... but we don’t have the right tools to really be able to execute.” (04:16-04:28).
• Overcomplicated Contracting:
  • Contracts are “overly complicated and it doesn't need to be that complicated.” Simplicity would enable more value-based contracts.

---

4. Investments and Initiatives to Reshape Health Plans

• Integrating AI: Process Before Technology
  • AI will not work unless payer operations are simplified first:
    • “AI will not be effective unless we improve our processes. And we need to simplify.” (05:56)
    • Current tools often serve only single points, not full workflows.
  • Emphasis on end-to-end process optimization with AI enhancing transparency and accountability for all stakeholders, especially providers and members (06:20).
  • On removing “sludge”: Both payers and providers must question, “Are we being a little pedantic here or can we get rid of some of the sludge that's in the system that we really don't need?” (07:05)

---

5. True Consumer-Focused Simplification

• Challenge of Consumer Experience:
  • Sharon cautions against paying lip service to consumer-centricity: “If we really cared about our patients and our members, would our deductibles be that high?” (07:41).
  • Tools like Chargemasters and confusing insurance terminology alienate consumers.
  • “Consumers don’t understand this stuff... if you’ve got to have a PhD in economics to understand, then we’re really not being consumer-friendly.” (07:49-08:05)

---

6. Preferred Regulatory and Industry Changes

• Universal Healthcare Coverage:
  • Sharon’s top regulatory wish: universal, cradle-to-grave coverage (not necessarily single payer).
    • “We need cradle to grave... people coming on and off insurance... trying to figure out, can I pay rent, can I pay for food, or can I pay for health insurance?” (08:23-09:08)
• Eliminate Prior Authorizations:
  • Calls prior auth “sludge” that creates animosity among all parties.
  • Proposes less punitive post-hoc quality reviews instead.
  • “What prior authorizations have come to represent is the sludge in the system in a form of cash flow management.” (10:27)
• Reduce Consumer Cost Barriers:
  • Suggests removing high deductibles and coinsurance, which function as a tax on providers and confuse patients.

---

7. Barriers to Change and Cost Pressures

• Why Change Is Hard:
  • Tradition and politics, plus an ingrained belief that processes like prior authorization add value, even when denials yield only marginal direct savings:
    • “We are the land of steady habits... the net of actual denied care is somewhere between 2 to 5%.” (11:24-11:47)
    • Need for brave leadership and true change agents.
• Top Margin Pressures:
  • Rising utilization trends—across all products, not just expensive new drugs (like GLP-1s) (12:41).
  • Soaring drug costs, aggravated by the U.S. subsidizing drug pricing for the world.
  • Sharon advocates “global pricing” tools, referencing consultants comparing international prices for each drug (13:22-13:50).

---

Notable Quotes & Memorable Moments

• On Overcoming Healthcare’s Tech Aversion:
  • “My God, do we love a spreadsheet and a fax machine!... We are lagging behind many other industries and there's extraordinary opportunity.” – Sharon Williams (03:54-04:12)
• On False Consumer-Centricity:
  • “If we really cared about our patients and our members, would our deductibles be that high?... We’re really not being consumer-friendly.” – Sharon Williams (07:41-08:05)
• On Prior Authorization:
  • “What prior authorizations have come to represent is the sludge in the system in a form of cash flow management.” – Sharon Williams (10:27)
• On Drug Pricing:
  • "[The] United States is subsidizing drug and pharmacy costs for the world and we need to adopt global pricing." (13:16)

---

Timestamps for Core Segments

• Guest Background: [01:01]
• Provider Relationships & Workforce Shortages: [01:42-03:30]
• Gaps in Payer Operations: [03:51-05:28]
• AI & Process Simplification: [05:42-07:22]
• Consumer Experience Critique: [07:33-08:12]
• Regulatory/Industry Changes: [08:12-11:05]
• Barriers to Change: [11:05-12:26]
• Margin Pressures & Drug Pricing: [12:41-13:59]

---

Tone

The conversation is candid, pragmatic, and focused on actionable solutions. Sharon Williams brings seasoned expertise and outspoken advocacy for transformative change, counterbalanced by Scott King's attentive facilitation and emphasis on practical steps forward.

---

Transcript

[A]

This is where healthcare leadership comes together. Becker's 16th annual meeting brings more than 3,500 hospital and health system executives and nearly 800 speakers to Chicago, April 13th through the 16th. This year's event includes keynote conversations with Dallas Cowboys legend Troy Aikman and former President George W. Bush. For the agenda and event details, visit Beckershospitalreview.com and click on the Events tab in the upper right. We're looking forward to hosting you in Chicago. Hello, everyone, and welcome to the Becker's Healthcare Podcast. I'm Scott King, thrilled today to be joined by a very special guest, Sharon Williams, chief executive Officer of University of Michigan Health Plan, who also is a consultant to payers and providers. Sharon, how are you today? Thanks so much for joining us.

[B]

Hey, Scott, thanks for having me. And I'm doing fabulous.

[A]

Excellent. Yeah, we have a lot of, you know, big health plan topics and questions for you to get to, but before we dive in there, I just wondering if you could please share a little bit about your background and your career journey.

[B]

Thanks, Scott. You know, I've been in the healthcare industry about 30 years and, you know, I started off my career with the blues and worked with a number of health plans and became a consultant where I worked with both payers and providers and even state and federal governments. And I'm currently advising digital health companies. So I feel like I've touched almost every facet of the healthcare industry in.

[A]

The U.S. yeah, absolutely. That really ties into our first question your experience does, Sharon, as you've dealt on kind of both sides, how are your relationships with providers changing as both sides face cost pressure and workforce shortages?

[B]

That's a great question. And for the University of Michigan specifically, we really pride ourselves on being very member and provider focused. While we're going through some really tough times, we making it a point to over communicate with our providers, be proactive. If there's certain things that are happening. We're not just sending out emails or broadcasts. We're calling to speak with office managers. We're intensifying the quality of the conversation we're having with some of our large health systems throughout the state. But I can also just share with you, having seen both sides being a payer and a provider, some of these conversations can get a little contentious and we're working specifically to keep it civil, keep it respectful, and understand that big beautiful bill. And our workforce shortages are challenging for both sides and it's difficult to find quality people. But we know that our health systems and our providers do not work for free. Everybody has to really cover their expenses. It's really having quality conversations. I would just also say the other thing we're seeing is a lot of creativity. Are there other paths to professionalism to address those workforce shortages? I can see that as a board member for a mental health organization I work for, they're actually training, they have their own internships and their own fellowships within their organization to help build a better pipeline for candidates. So yep, while there's cost pressures and workforce shortages, it's pushing a level of creativity that I think is unparalleled.

[A]

I think it's a great perspective to have share, especially with everything going on in healthcare now, to, you know, kind of zero in on being professional and that mutual respect, you know, as the old saying goes, you catch more flies with honey. So I think that's fantastic. And where do you see the biggest gap today between payer strategy and operational execution?

[B]

So one of my tags in my consulting practice is executing value because a lot of the payer strategy is still pretty manual. My God, do we love a spreadsheet and a fax machine? And so when I talk to people who are in tech or in banking, they continue to be surprised by how manual our operational execution is. In health care. We are lagging behind many other industries and there's extraordinary opportunity. And I know the buzzword is AI, right? So it's like how long did I go before I mentioned AI? But we are an industry in need of AI. And so while there are some sophisticated players who are using AI tools, especially in the rev cycle area, specifically, specifically in pair strategy, there are so much data at our disposal, but we don't have the right tools to really be able to execute on that. And I think the other things that are really simple and I call it being brilliant at the basics, but our contracting, sometimes our contracting is overly complicated and it doesn't need to be that complicated. So while the payer strategy maybe, you know, we need to keep our contracts at a particular percent of payment within a specific market, the ability to do that and to be able to execute more value based contracts is a lot more complicated than we've actually been able to deliver on.

[A]

I want to ask you, what do you think one investment or initiative you believe will most reshape how health plans operate, you know, over the next two to three years? And does that have to do with AI? Is there, is there a way AI can better serve in the payer space?

[B]

Yeah, I feel like. So Scott, you know, I listen to Becker's Pair podcast that's Great. When I'm brushing my teeth every morning. So, so I, you know, I think one thing everybody's talked about, the role AI is going to play. Right?

[A]

Right.

[B]

AI will not be effective unless we improve our processes. And we need to simplify. So while we're investing in AI and a lot of the tools that are out there, they can't be single solutions. We really need to think about end to end and the consumers we need to think about most in this conversation are the providers and the members and how we can make it more simple for them. There are AI tools that are now really taking the consumer into account. Whether it's creating interoperability among the hospital post acute home health in the case of dementia, or some of our seniors bringing the families in, there are some wonderful AI tools that are giving all, all stakeholders access to the same data. So that's creating transparency, it's creating levels of accountability and communication. That's really exciting. So I think that's part of the investment that needs to happen. And both payers and providers need to look at their processes to see are we being a little pedantic here or can we get rid of some of the sludge that's in the system that we really don't need?

[A]

So sure. Do you think the best way to kind of simplify those processes on both sides is just to kind of focus in on what consumers need most or what patients need the most, is that the way to kind of streamline everything?

[B]

Yes, Scott, but I want to be careful as we say that, because I think spot on, but everybody gives lip service to that.

[A]

Yeah, right.

[B]

So if we really cared about our patients in our members, would our deductibles be that high? Would we have CO insurance? Would we have Chargemaster? Consumers don't understand this stuff. So if we're talking about transparency on one end, but we have payment tools and pricing tools that nobody understands, or you've got to have a PhD in economics to understand, then we're really not being consumer friendly.

[A]

Yeah, absolutely. Let me ask you this, Sharon. If you could change one regulatory or industry practice tomorrow to improve affordability and access, what would it be and why?

[B]

Okay, Scott, I'm going to ask you if I can have two, please. Okay. So the first is regulatory. In this country, we really need universal health care, cradle to grave coverage. I'm not saying single payer. I want to be really clear. Single payer is a dream. We don't have the infrastructure for it, but we can do universal, whether you call it Medicare for All Whether you call it Susie, I don't care. We need cradle to grave. What I'm seeing is people coming on and off insurance, whether because they lost their job, whether it's because we're in the gig economy. And what they're doing is they're trying to figure out can I pay rent, can I pay for food, or can I pay for health insurance. And what I'm literally seeing is people who become effective with their insurance, let's call it January 1st, then January 3rd, they have major surgery scheduled and it's like, what was this person doing at this time? And then when you look at Medicare, people who become Medicare eligible at 65 and they are chronically ill and they need a host of services as soon as they come on to Medicare. So we really need to address insurance coverage because insurance coverage is becoming reflective of the health of our, of our country. And right now Americans are sick and we're seeing it in utilization across all products. So that's, that's one regulatory change. The other industry practice that I would get rid of for the most part are prior authorizations. They're sludge. They create a level of animosity between both payers and providers. And I would throw in consumers too. And what I would love to see is more kind of retroactive work being done, conversations around quality and outcomes that aren't punitive. Because what prior authorizations have come to represent is the sludge in the system in a form of cash flow management. I have a number of friends who hate me when I say this, but I want to plant those seeds. And if maybe a third is getting rid of like high deductibles, the coinsurance, again, tools that consumers don't understand that also become another tax to our providers in the system. And really just trying to simplify things, that's going to be my mantra from both a payer and a provider perspective going forward. Let's get back to simplicity and let's make health insurance tools that are more consumer friendly.

[A]

I know there'd be a lot of, there is a lot of payer leaders who share your sentiments there, especially with prior authorization. I remember some people talking about it at length at our November conference. In your mind, Sharon, what are the issues standing in a way of either improving it or doing away with it?

[B]

Well, politics first. And we are the land of steady habits. So people have gotten used to prior authorizations and then just the logic around it. We've convinced ourselves that we are somehow adding value. But if you look at most organizations, the net net And I'm not talking about the initial prior authorization, but once you get done looking at medical documentation, peer review that the net of actual denied care is somewhere between 2 to 5%. I think we need to address the culture change, change management and have conversations around that. And I love what one of our health plan leaders says, the CEO of scan. He talks about the need for leadership and people being more brave and outspoken. And I think he's absolutely right. And I like to consider myself a change agent and liking to work with people who are mission driven and want to improve the US Healthcare system.

[A]

Certainly right. Leadership can always make the biggest change and the necessary change. Last question I want to ask you, Sharon. What issue is putting the most pressure on health plan margins right now and how will you respond differently to that in 2026?

[B]

Yeah, so it's utilization trend and it's not just the GLP1s in drugs. It's utilization just across the board, across all products. And what we can do is try to create cost effective insurance that patients are attracted to. We try to do that at the University of Michigan. This last year we were the lowest priced cost product, especially in aca. The other that's putting pressure on health plans is our drug pricing. Again, it's not unique to Michigan. It's a US thing where the United States is subsidizing drug and pharmacy costs for the world and we need to adopt global pricing. And again, I'm seeing AI tools out there. I'm actually working with a consultant right now and he has a pharmacy pricing tool that looks at global pricing for each drug and can come up with the best price, whether it's in Israel, Switzerland, Canada. And we need to start using these global pricing tools to drive the price of drugs down.

[A]

Sharon, thank you so much for joining us on the podcast and sharing all your incredible thoughts with great perspective. Really appreciate your time and I look forward to working with you again soon.

[B]

Thanks God, and we'll see you in April.