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Health Care Risk Sharing, Integration & Accountable Care – Part 4

RISK SHARING, INTEGRATION AND ACCOUNTABLE CARE:  MECHANISMS FOR PROVIDER RISK SHARING AND INTEGRATION

The commonality through all risk-sharing is the placement of a provider’s fee at risk for underperformance and the sharing of financial rewards for meeting performance targets.  All traditional risk sharing arrangements maintain this element.  However, novel arrangements transcend simply placing the provider’s fee at risk. Novel arrangements require providers share in the potential loss experienced by utilization costs exceeding actuarial norms.  In return however, providers can employ contracting techniques that permit them to share increasing portions of the gains experienced by payer for solid financial performance.  Proper understanding of risk sharing requires an understanding of the parties to the relationship, the general forms of provider integration, the role of centralized organizations in multi-provider models, specialty and care-out networks, the general contractual mechanisms of risk-sharing through provider compensation arrangements, basic contracting considerations, and working knowledge of the basic contracting terms.

Our next sever posts will explore the above.  This article is a series on risk sharing, integration and accountable care