Exploring Shared-Savings Programs

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<p>Shared-savings programs are gaining traction as an alternative way of paying health care providers. Unlike traditional fee-for-service—in which providers are paid more for delivering a higher volume of services, regardless of medical need—providers in a shared-savings model are rewarded for delivering high-quality care at lower cost by receiving a share of the net cost savings. </p><p>A new <a href="/publications/fund-reports/2012/aug/shared-savings-payment-arrangements-health-care-six-case-studies">Commonwealth Fund report</a> by author Michael Bailit and colleagues examines six case studies of shared-savings initiatives across the country. The programs vary considerably along several fronts: patient populations, the health care services covered, the way in which cost savings and provider payouts are determined, the use of performance targets, and performance measurement. Despite these differences, the authors also identified common themes, including a willingness to absorb start-up costs, as well as a belief that shared-saving programs must evolve to include shared risk. </p>