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Improving Partnerships Between Health Plans and Medical Groups

calculator health care costs

The Issue

Controlling growth in health care costs will require cooperation between insurers on one side and providers on the other. This is a challenging task, given the historically adversarial relationship between the two groups. Payer–provider relationships have been complicated by distrust, conflicting objectives, and a lack of data transparency.

What the Study Found

Commonwealth Fund–supported researchers shared insights from interviews conducted with medical group and health plan leaders from four successful partnerships: Blue Cross of Michigan Physician Group Incentive Program, Colorado Multi-Payer Patient Centered Medical Home Pilot, Excellus Health Plan’s Upstate New York Non-Invasive Cardiology Project, and Blue Cross of Massachusetts Alternative Quality Contract. They identified three themes common to successful collaborations:

  • Building infrastructure. Traditionally, when designing contracts that include shared accountability for costs and outcomes, providers and payers have behaved competitively, with each side seeking to further its own interests. But in more successful partnerships, both sides are transparent in defining financial goals and work together to achieve the organizations’ objectives.
  • Engaging clinicians. If dollars are used as the primary incentive for physicians, there may be a return to previous, nonproductive behavior once the reward is removed. The researchers found that talking to practitioners primarily about cost reduced their enthusiasm for quality improvement initiatives. Instead, physicians were more responsive to the idea of improving care when they received peer comparison data.
  • Collecting and using data to improve outcomes. “Having accurate peer comparison data is a powerful, if not the most powerful, motivator of practitioner behavior change,” the authors say. Combining clinical data with claims data will allow providers to focus on the relationship between cost and quality, but the data merge requires transparency and trust.


Reining in escalating costs and improving care will depend largely on the effective partnering of health plans and medical groups. Working together will require a transparent articulation of mutually acceptable goals and data that allow for identifying and promoting low-cost, high-quality practices.

Publication Details



Mary Mahon, Former Vice President, Public Information, The Commonwealth Fund

[email protected]


H. Beckman, P. Healey, and D. G. Safran, “Improving Partnerships Between Health Plans and Medical Groups,” American Journal of Managed Care, Sept. 2015 21(9):647–50.