Value-Based Payment Model vs. Business Develop Strategy
Payer contracting has evolved in most markets, and progressive providers are now focusing less on rates, more on value creation (i.e., improved access, data-sharing, total cost of care, superior outcomes and the development of true payer/provider partnerships). Such providers are also more likely to view risk-based contracts as a legitimate opportunity to differentiate themselves as "high-performers" with payers and employers alike.
In this particular case, the client also sought an opportunity for additional patient volume.
The end result was an integrated strategy that ultimately hit every mark - reduced cost, improved quality, a highly-engaged medical staff (with a new base of referring PCPs), and a much deeper relationship with the health system's largest payer.
Client:Health system with a specialist dominated medical staff and moderate risk tolerance.
Competition:Two larger, regional health systems and an academic medical center with longstanding referral relationships.
Payer Relativity:Below average contractual rates with comparatively average quality indices.
Solution:Transitioneda legacyFFS agreement with nominal performance incentives to an upside/downside model, with a balanced risk corridor, to enable enhanced primary care physican reimbursement and substantial organizational growth. This unique model resulted in a differentiated primary care alignment strategy which could not be easily replicated by their higher-cost (and less nimble) competition.