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Business Of Health

A Longitudinal Perspective On Health Plan–Provider Risk Contracting

During the past decade many health plans adopted risk-contracting arrangements that transferred substantial financial risk and care management responsibility to physician groups and hospital-sponsored integrated delivery systems. Risk transfer arrangements are now believed to be in steep decline, but there is little empirical evidence on this topic, particularly at the local-market level. Data from the Community Tracking Study were used to examine changes in risk contracting from 1996 to 2000. A decline in reliance on risk contracting is evident in nearly all markets. However, retrenchment in risk contracting has followed different patterns ranging from refinements in the scope of risk transfer to reduced use of risk arrangements to total rejection of risk-sharing arrangements. Modified risk-transfer agreements remain viable in several markets, but continued refinement in the nature and scope of risk sharing will be necessary.

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