Out of 85 payer arrangements, more than one-third were for upside-only shared savings, but the upside option was noticeably lacking in commercial markets, according to a new whitepaper from Premier.
Shared savings agreements typically come in two forms. An upside-only agreement involves no downside risk for failing to achieve cost targets. An agreement with downside risk involves providers agreeing to "pay back" any spending about the cost benchmarks.
Fifty-seven percent of upside arrangements fell within the Medicare Shared Savings Program or Medicare Advantage, while 7 percent of upside arrangements were reported within Medicaid, 7 percent with provider-owned health plans and 7 percent with self-insured employers.
Among the accountable care organizations analyzed in the whitepaper, only 21 percent of commercial arrangements offered upside shared savings. Those contracts were clustered in just four markets and they also tended to be smaller in scope, usually for 5,000 covered lives or less. Premier also reported that nearly 70 percent of commercial payment arrangements to date have been limited to either care management fees or downside shared savings models.
Here are some other major findings from the whitepaper, which details various ACO and payer arrangements among 22 health systems that are part of Premier's Partnership for Care Transformation Population Health Initiative.
Number of lives covered by model
• Shared savings agreement with upside risk: 41 percent
• Shared savings agreement with downside risk: 26 percent
• Care management fees: 21 percent
• Bundled payment: 9 percent
• Capitation: 3 percent
Range of savings provided to ACOs
• Public payers: The range of savings provided to the ACOs by public payers, such as Medicare and Medicaid, runs between 25 percent to 60 percent.
• Commercial payers: ACO arrangements with commercial insurers typically result in the provider receiving 50 percent to 80 percent of any achieved savings.
• Employer payers: Employers offer some of the broadest arrangements, with anywhere from 100 percent of savings with downside risk, to 50-50 shared savings arrangements in upside-only arrangements.
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Shared savings agreements typically come in two forms. An upside-only agreement involves no downside risk for failing to achieve cost targets. An agreement with downside risk involves providers agreeing to "pay back" any spending about the cost benchmarks.
Fifty-seven percent of upside arrangements fell within the Medicare Shared Savings Program or Medicare Advantage, while 7 percent of upside arrangements were reported within Medicaid, 7 percent with provider-owned health plans and 7 percent with self-insured employers.
Among the accountable care organizations analyzed in the whitepaper, only 21 percent of commercial arrangements offered upside shared savings. Those contracts were clustered in just four markets and they also tended to be smaller in scope, usually for 5,000 covered lives or less. Premier also reported that nearly 70 percent of commercial payment arrangements to date have been limited to either care management fees or downside shared savings models.
Here are some other major findings from the whitepaper, which details various ACO and payer arrangements among 22 health systems that are part of Premier's Partnership for Care Transformation Population Health Initiative.
Number of lives covered by model
• Shared savings agreement with upside risk: 41 percent
• Shared savings agreement with downside risk: 26 percent
• Care management fees: 21 percent
• Bundled payment: 9 percent
• Capitation: 3 percent
Range of savings provided to ACOs
• Public payers: The range of savings provided to the ACOs by public payers, such as Medicare and Medicaid, runs between 25 percent to 60 percent.
• Commercial payers: ACO arrangements with commercial insurers typically result in the provider receiving 50 percent to 80 percent of any achieved savings.
• Employer payers: Employers offer some of the broadest arrangements, with anywhere from 100 percent of savings with downside risk, to 50-50 shared savings arrangements in upside-only arrangements.
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