Health Affairs Article on Shared Savings Programs

An article in the September issue of Health Affairs, co-authored by Joel Weissman, Michael Bailit, Guy D'Andrea, and Meredith Rosenthal, discusses "lessons learned" from early adopters of shared savings programs. Shared savings programs reward providers for holding spending below specific targets, thus introducing a level of financial accountability for physicians not present in strictly volume-based payment models, such as fee-for-service. The article examines the design and application of shared savings formulas across a range of actual programs. It also presents a more detailed description of one particular shared savings program—the Massachusetts Patient-Centered Medical Home Initiative—focusing on key trade-offs between payers and providers that eventually led to agreement on specific aspects of the program. The article concludes with recommended principles for the design of future shared savings arrangements and consideration of issues that will confront decision makers as these efforts mature and expand.