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Strategic Planning for a Health Plan


A Midwest-based health plan operated by a health system


To align the health plan and associated health system providers to deliver better quality care at a lower cost.

Veralon has facilitated an annual strategic planning process for the health plan for the past five years, with each year’s plan building off results from prior years. Recently, leadership had become increasingly aware that it needed a game-changing innovation to be able to provide price-competitive products in the new insurance marketplace. The health plan sought a new internal payment model to align its health system providers with efforts to manage medical costs and quality.


Veralon facilitated a retreat, presenting three potential contracting options to support alignment between the health plan and the provider network: pay-for-performance, shared-savings, and global capitation arrangements. The health plan favored a global capitation arrangement but it was unclear whether health system leadership would agree to this approach.


Ultimately, consensus was reached on phasing in a global capitation arrangement with additional quality incentives. This new model will catalyze new provider efforts to redesign care delivery, and will support lower cost insurance products needed to gain share in the insurance marketplace.