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Creating a Payer-Provider Collaborative for Value-Based Payment as a New Competitive Platform


Regional health plan in a competitive Mid-Atlantic market


To develop a strategy for the health plan to engage providers in joint accountability for cost and quality.


Veralon helped the health plan to identify both the “who” and the “what” of a plan for collaboration with providers. We started by developing an understanding of the relationship between the plan and each of the hospital providers, and between the hospitals and their physicians. We inventoried the hospitals/systems to determine which ones had a strong network of employed physicians, which had a PHO and which had strong relationships with physician groups. We identified the providers that the health plan should target for collaborative opportunities, and “reality tested” these recommendations with a client working group.

Once desirable strategic provider partners were identified, we developed recommended programs for collaboration. The objective was to find models that improve care and lower utilization and costs while providing bottom-line benefits to both providers and insurers.

Building on existing Veralon familiarity with payment innovations and clinical integration, we did extensive research on which program models would have the greatest financial impact for the insurer. Selected programs included:

  • Select Network Product: Creation of a tiered benefit product for a more narrowly targeted hospital network
  • Patient Centered Medical Home: Extend best practices to additional primary care providers to transform primary care
  • Transitions of Care: Enhance quality and reduce complications by smoothing transfers upon discharge
  • ER Follow-Up Care: Provide health plan care managers with rapid access to patients who may need better care coordination

We projected the cost and utilization impact of the four identified programs at each of the proposed collaborative partners, as well as the timing of both costs and impacts. Based on this we estimated savings to the insurer and benefits to the providers. We quantified the additional volume and incentive payments providers could expect, and estimated the financial impact these programs might have on the providers to ensure that the proposed opportunity was appealing from their perspective.


Veralon assisted the health plan and its providers to implement the recommended initiatives. We facilitate two collaborative work groups to define organizational structure and plan the programs to be launched next quarter.