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Task Force of Healthcare Providers and Insurers are Shifting to Incentive Based Contracts

Some of the largest healthcare providers and insurers in the country have joined to form the Healthcare Transformation Task Force in an effort to change healthcare industry payment models.  The announcement of the task force and its efforts come shortly after the Department of Health and Human Services announced plans to overhaul Medicare’s fee-for-service program and transfer non-managed care spending to contracts that incentivize quality performance and cost control.  A unified vision of shifting to incentive based contracts has brought together health systems, Ascension, Trinity Health, Partners HealthCare, and Advocate Health Care, insurance titans Aetna and Health Care Service Corp., and Caesars Entertainment and the Pacific Business Group on Health to form the Healthcare Transformation Task Force.  The goal of the task force is to transform 75% of their business contracts to incentive based contracts focused on improving healthcare quality and lowering healthcare costs.

Partners Healthcare’s senior vice president for population health, Dr. Tim Ferris, stated that the focus of these efforts is alignment of payors and providers. The task force will not just work to develop new contracting methods focused on incentivizing providers based on quality and outcomes, but will also develop policy proposals focused on accountable care, bundled payments, and cost management aimed at reshaping the entire healthcare industry.

There is not enough evidence to say with certainty whether these efforts will achieve intended outcomes.  More data concerning accountable care and bundled payments is needed to determine which quality measures and financial incentives will be effective.  However, members of the task force are enthusiastic about the venture and will undoubtedly use their substantial market power and resources to achieve their desired goals of improving care, lowering costs, and enhancing the patient experience.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume V, Number 36



About this Author

Aytan Dahukey, Sheppard Mullin, Health Care Lawyer, Finance Attorney

Aytan Dahukey is a partner in the Corporate Practice Group in the firm's Century City Office and is a member of the firm's Healthcare, Emerging Growth/Venture Capital and Private Equity Industry Teams. As an active member of these industry teams, Aytan enjoys a wide-ranging practice that spans across several sectors.

Aytan’s healthcare practice focuses on public and private mergers and acquisitions and general corporate counsel representing a wide variety of healthcare-related clients in California and nationally. His clients include independent...

TyAnthony Davis, shepparmullin, corporate attorney, law firm

Ty Anthony Davis provides general business legal advice, assist in structuring and implementing major transactions, prepare agreements to address unique business arrangements and consult with clients to resolve major business and ownership issues.