How to Tell Your Supplier: It's Time To Talk About Risk Sharing.


Tue Mar 29 13:00:00 CDT 2016
Kevin Freeman
Director of Provider Solutions, Medtronic

Risk-sharing partnerships are becoming more prevalent in healthcare. As providers focus more on outcomes and take on financial risk, they're looking for strategic partners to help fulfill their missions of providing better care at lower costs.  But how do you start this conversation with leaders inside your hospital, and with suppliers who are accustomed to more transactional relationships? Here are five key factors to have a successful conversation.


Pop the question. Start by asking directly, "What type of shared risk agreements have you implemented to help your customers transition from a fee-for-service model to value-based reimbursement models that are becoming more prevalent?" If they come back empty-handed, tell them that suppliers who will align their incentives with your goals are going to win your business. Even if you risk tearing apart the portfolio you have with a supplier--if you can garner savings and align outcomes to project savings, the ultimatum is worth it. 


Define "risk." Once they come back to you with a plan, be prepared to talk through possible scenarios. It's important to settle on a definition of risk. Is it outcomes-based risk sharing? Is it shared savings? Is it committing business for improved savings or quality? Define what risk means to both parties. Is it between the supplier and the provider? Is it between the provider and the payer? And so forth.


Bring the intelligence. Know the procedures at your organization that are high in cost, highly variable in outcomes or high volume. Bring some basic cost and quality data around those procedures to have a productive conversation. 


Prepare as a team. Since this conversation is about much more than line-item costs, leaders who are involved in moving the organization to a value-based environment should be included in the conversation. The five key areas of representation include finance, supply chain, clinical, IT and C-suite management. 


Discuss the implementation. It's very important to ask, "How do you operationally implement the concept?" Many suppliers want to talk about risk-sharing up to the point of operationalizing the plan, but very few have really got beyond that point. 


Has your team successfully implemented risk-sharing partnerships?  Tell us your success stories in the comments field!


As Director of Provider Solutions, Kevin is responsible for overseeing the implementation of value-added programs and services for health systems.