Centura Health, a 13-hospital system in Colorado, has enjoyed success with pay-for-performance contracts for nearly a decade. Bradley Olson, former director of payer relations and contracting, shares what works-and what does not-in accepting risk based on performance.

• Use simple measurements that incorporate both the payer's and the health system's goals
• Set goals that are achievable through operational changes and hard work
• Do not agree to goals that will be unattainable
• Ensure that the relevant clinical teams know the baseline measurement and how improvement affects the health system financially
• Communicate results to those clinical teams as often as possible
• Reward clinical and quality teams for achieving pay-for-performance goals
• Have appropriate resources in place to implement a pay-for-performance contract before the contract is signed
• Ensure the right process is in place to succeed on each goal
• Monitor progress often
• Do not get discouraged if you don't achieve the goals every year at 100 percent
• Set reasonable targets so you can be confident the benefit of pursuing the goal outweighs the resource costs
• Remember the true goal is better quality care for patients

Return to related Leadership article: The Push to Value-Oriented Payment 

Publication Date: Friday, May 25, 2012