Recent healthcare trends suggest that quality patient care comes from a holistic approach focused on minimizing hospital visits and better managing long-term chronic conditions. For this reason, many physicians and practices are shifting to a value-based reimbursement model where success is measured in patient outcomes rather than simply the number of services provided. These risk-based contracts in turn help practices receive financial incentives while still prioritizing top-notch patient care.

Risk-Based Contracts

At their core, risk-based contracts are agreements between healthcare providers and insurance companies that connect reimbursement with tangible patient outcomes (cost-effectiveness, efficiency of services, minimization of hospitalizations, etc.) rather than volume of services. This means that both healthcare providers (whether that be a physician group or practice) and payers themselves share financial risk and therefore also both benefit from positive patient outcomes.

This approach to reimbursement is a stark change from traditional fee-for-service models where providers are reimbursed for individual services such as blood panels, office visits, procedures, etc. While this model is typically considered low or no-risk for providers, the consequence is that patient care often becomes secondary to volume of services and ensuing reimbursement. In this way, risk-based contracts help realign provider and patient goals together, while still providing financial benefit to both.

Financial Benefits

Alongside the enhanced patient care that often comes from transitioning to value-based reimbursement models, this approach also promotes cost-savings overall. Reimbursing for quality of care rather than amount of services provided means that payers have to front fewer costs while physicians can prioritize preventative care processes and cross-disciplinary care for whole-person wellness. In this way, profits remain high only when patient care remains high-quality, incentivizing providers, insurance companies, and patients themselves.

Criticisms of risk-based contracts often center on the fact that, within this model, physicians are expected to take on a bulk of the financial risk and may be responsible for a portion of costs if service expenses exceed targets. However, these contracts can also be negotiated to ensure providers are also able to share in savings if care costs end up being less than expected.

The physician-led team at GMP Network is there to help members evaluate, negotiate, and succeed in risk-based contracts. By offering specialized admin support, streamlined workflow solutions, and useful tools for tracking, assessing, and monitoring patient outcomes, GMP Network can help physicians transition to a value over volume model to enhance their quality of patient care.