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Payer Contract Modeling for Major Pay-For-Performance Contract


A five-hospital health system


Create the tools and methodology to allow the client to choose whether to participate in a quality-based pay-for-performance program, and to provide the data to support them in participating if they chose to do so. The system was struggling with the financial burden of a large base of Medicaid and indigent care patients.


We created a detailed simulation model that let the health system assess the potential impact of the proposed agreement.


Based on this assessment, the client decided to move ahead with pay-for-performance, and was also able to negotiate for performance metrics and goals that worked to their benefit in determining whether they had achieved quality goals.

This client now has the tools and skills to manage the ongoing modeling and performance analysis it needs to manage this essential payer contract. The health system has reported highly successful financial and operational performance with this payer agreement. The pay-for-performance program has also boosted morale and public image for some of the hospitals by creating a healthy competition to achieve quality goals.