In international relations, hard power uses force or coercion — military action, sanctions, binding resolutions — to change another actor’s behavior. Soft power works through persuasion: diplomacy, alliance pressure, reputational costs, and coordinated signals. Recent events make this distinction clear. Sanctions on Russia represent hard power intended to alter Russian behavior; diplomatic isolation and collective condemnation represent soft power aimed at shaping the same target through influence rather than force. In many situations, the most durable strategies combine elements of both.
Payers face a similar choice. Within utilization management (UM), hard approaches rely on rules and restrictions — prior authorization, step therapy, formulary exclusions, and coverage limits — while soft approaches, sometimes described as “soft steering,” rely on influence: education, peer comparison, transparent cost data, and clinician engagement. Hard approaches to UM sometimes produce rapid, predictable changes in a clinician’s plan-specific behavior. Soft approaches to UM can shift behavior when restrictions would be too costly, too abrasive, or too politically sensitive. The real question is not which tool is better but when each one makes sense.
When soft approaches work
Soft approaches to UM succeed when economic, relational, and political conditions align.
When hard restrictions face obstacles
Soft approaches work when hard approaches to UM are constrained. Certain specialties — notably oncology in markets where supply is thin — are sufficiently scarce that plans cannot push UM aggressively without jeopardizing relationships or member access, especially in politically sensitive or high-visibility areas. Regulatory constraints also matter: Under Medicare Part D, protected classes limit formulary exclusion, even though plans can still apply substantial UM. Limiting access to rare-disease therapies can carry reputational risks, though plans may still manage them aggressively when alternatives exist. Many institutions also follow standardized clinical pathways or purchasing agreements that limit the practicality of external mandates. Hard approaches to UM create visible friction — denials, appeals, and peer-to-peer disputes — that exposes plans to political and reputational blowback. Soft approaches avoid those confrontations and become the rational choice not out of preference but because coercion carries high political, operational, or clinical cost.
When the message is clear and clinically legitimate
Soft approaches are most effective when the message is simple: Drug X and Drug Y are clinically comparable, and Drug Y offers meaningful savings. Clear therapeutic equivalence supports persuasive messaging, as with compounded bevacizumab in wet AMD, ketamine formulations in psychiatric care, or lower-cost NSAID/antacid combinations compared with branded pairs like Duexis or Vimovo. Clinicians are more receptive when the guidance aligns with evidence, feels clinically legitimate, and does not appear punitive. Ambiguous or contested clinical areas offer weaker footing for influence. At Kaiser Permanente, clinicians do not see point-of-care cost displays at the moment of prescribing; instead, cost-effective choices are shaped upstream through shared pathways, peer discussions, and clinical governance.
When relationships enable high-touch engagement
High-touch, relationship-driven engagement makes soft approaches more viable. Regional plans with strong provider-relations teams, PBMs with targeted clinical programs, and integrated delivery systems with close physician ties can engage clinicians through peer-to-peer dialogue, case reviews, and focused data sharing. These approaches have helped to shift prescribing toward biosimilars or preferred agents without restrictions. The key factor is not the size of the plan but the density and depth of its relationships. Kaiser, one of the nation’s largest plans, has tight ties to its physicians, making persuasion efficient and scalable.
This closeness is reinforced by Kaiser’s governance model, where physicians participate directly in technology assessment and formulary decisions, reducing resistance to cost-effectiveness initiatives. Kaiser operationalizes this through pharmacists who educate clinicians and through internal specialist “champions” who educate primary care physicians on preferred therapies. Behavioral norms also play a role: Kaiser uses unblinded, peer-visible performance reporting that reinforces appropriate prescribing through professional expectations rather than restrictions. By contrast, even midsized plans with loose or purely transactional relationships often lack the relational credibility required for persuasive strategies. Soft approaches are also more effective when plans have credible medical leadership; trusted medical directors or CMOs can lend legitimacy to the message and strengthen clinician engagement.
When testing the water — or priming the pump
Soft approaches can be a way to test the water before implementing restrictions. Plans may first engage high-volume prescribers to discuss cost differences, share outcomes data, or float potential changes. This helps to surface objections, gauge likely pushback, and identify where a potential step-therapy requirement may provoke friction. It is a practical way to assess whether implementing a hard rule would be politically or clinically costly. This approach is most valuable when a change would affect a small group of vocal prescribers; early engagement reveals whether a restriction will spark disproportionate resistance. Education efforts, such as outreach to encourage biosimilar use, that precede restrictions serve a different purpose: They aim to shift baseline behavior, not to predict reactions to a forthcoming restriction.
When incentives support the preferred choice
Soft approaches are more effective when underlying financial structures nudge clinicians toward the choices plans prefer. Shared-savings models and other aligned financial incentives — capitated payments, bundled payments, or pay-for-performance bonuses — can make cost-efficient prescribing financially attractive. When physicians’ economic interests align with lower-cost therapies, persuasive approaches gain credibility and require far less friction than hard approaches to UM.
When soft approaches fail
Soft approaches are appealing but fragile. Several predictable conditions can undermine their effectiveness.
When providers participate in many plans
Most clinicians participate in many health plans. Because each plan has its own policies, formulary, incentives, and preferences, a single plan’s guidance affects only a portion of a clinician’s patients, diluting the impact of persuasion. Even well-designed outreach has limited effect when a provider’s daily practice must meet the demands of dozens of plans. Hard approaches to UM, by contrast, forces plan-specific behavior regardless of cross-plan variation.
When incentives are misaligned
Financial incentives can directly oppose payer-preferred choices. Buy-and-bill reimbursement can reward higher-cost infused drugs. Productivity-based compensation models, which reward physicians for delivering more or higher-complexity services, may also indirectly reinforce costlier prescribing. Meanwhile, manufacturers invest heavily in direct influence: sales representatives, copay cards, patient-support programs, and specialist outreach that often overshadow payer-driven education. These dynamics are amplified when patients face lower out-of-pocket costs for high-cost brands than for the cheaper alternatives plans prefer, further weakening the impact of soft approaches. In the face of these influences, soft steering has little chance of success, making hard approaches to UM the only tool with meaningful leverage.
When scale overwhelms high-touch approaches
Soft approaches require labor-intensive, relationship-driven engagement. National plans with large, diffuse provider networks cannot feasibly conduct high-touch outreach at scale. Reaching enough clinicians with individualized engagement is difficult. When outreach succeeds, clinicians often greet payer messaging with skepticism — doubting the source, the motive, or the accuracy of the information. Centralized educational materials or broad messaging rarely produce measurable behavior change. Hard approaches to UM scale more efficiently because they are applied through automated claims logic rather than relational infrastructure.
When providers operate within institutional systems
Clinicians often follow institutional pathways, electronic health record defaults, or drug-purchasing contracts that supersede individual payers’ preferences. In such environments, even strong individual relationships have limited influence. Hard approaches to UM may still be more effective than soft approaches, but even restrictions can fall short if institutional leaders do not incorporate outpatient-coverage considerations into inpatient decisions. When hospitals consider postdischarge coverage during early treatment planning, payer rules can meaningfully shape therapy choices; when they do not, hard UM loses much of its intended effect.
Know where to step: match the approach to the conditions
Hard approaches to UM create visible, concentrated friction at the point of care — friction that is politically costly but operationally predictable. Soft approaches generate a different kind of friction: They require investment in relationships, data systems, and clinical credibility, but tend to provoke less-overt resistance when the conditions support it. Neither approach eliminates friction; both simply relocate it, and the cost of that friction shows up in different places.
In many areas, hard approaches to UM, soft approaches, or a combination of both can be effective. The strategic challenge is recognizing when restrictive approaches are used simply because they are familiar — and whether a softer approach, alone or combined, might deliver better results.
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