Shared Savings Programs: Lessons Learned from a New York State Community Health Center

Across the country, providers and payers are experimenting with new payment arrangements to improve health outcomes and reduce costs.

The prevailing fee-for-service system pays for inputs rather than outcomes, and more care rather than better care. Alternative payment methods that move away from fee-for-service will drive meaningful change toward delivering and paying for better quality care. However, promising new reimbursement models are still being tested and refined to determine which are most effective, most appealing to payers and providers, and most likely to supplant the fee-for-service model.

Payers and community health centers can be at the forefront of efforts to restructure health care delivery and associated spending. For payers who want to pay to keep patients healthy, community health centers can be a testing ground to pay for value over volume. Federally qualified health centers are leading the way in orienting medical practice around patient outcomes, but they need access to plans’ patient data to curb inflationary practices like over-treatment and high utilization that happen outside their clinic walls.

In a project supported by NYHealth, the Institute for Family Health (IFH) took on the challenge of developing new payment arrangements with payers that would support better health outcomes. First, IFH needed to gain access to the broad array of data on its patients held by insurers. IFH found that both payers and providers need to build capacity to share, analyze, and act on data. When data was shared, it often came with strings regarding expected outcomes that did not always encourage real practice transformation or reimburse better care. IFH is working to align plans’ performance metrics to support the shared goal of keeping patients healthy. IFH now has shared savings agreements with five payers that cover 19,000 patients.

This interview between NYHealth President and CEO James R. Knickman and IFH President and CEO Neil Calman contains IFH’s lessons for payers and providers on developing shared savings agreements and recommendations on what it will take for payment reform to succeed in improving patient care.