Value-Driven Health Care Purchasing: Case Study of Minnesota's Smart Buy Alliance

August 15, 2007 | Volume 68

Authors: Sharon Silow-Carroll, M.B.A., M.S.W., and Tanya Alteras, M.P.P.


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The Smart Buy Alliance is a group of public and private health care purchasers in Minnesota working together in hopes of driving greater quality and value in the market. Its members—including the state agencies overseeing Medicaid and public employee health benefits, along with coalitions of businesses and labor unions—represent about 60 percent of state residents. The Alliance's members agree on common purchasing principles and share strategies for promoting and rewarding higher value. Strategies adopted by members include: a common set of quality standards to demand from health plans and providers; a tool that compares quality measures among health plans; a pay-for-performance program for physician practices; and evaluation and designation of certain health providers as "best in class." Looking ahead, there will be challenges associated with managing and sustaining such a broad alliance of members, getting employers to consider quality in addition to cost, and educating consumers.

Companion Case Studies:

Massachusetts Group Insurance Commission

Puget Sound Health Alliance

Wisconsin Department of Employee Trust Funds

Overview Report

Value-Driven Health Care Purchasing: Four States that Are Ahead of the Curve


S. Silow-Carroll and T. Alteras, Value-Driven Health Care Purchasing: Case Study of Minnesota's Smart Buy Alliance, The Commonwealth Fund, August 2007