C-Suite Cheat Sheet: Shared Savings

Educational Briefing for Suppliers and Service Providers

Executive Summary

Shared savings is a risk-based payment model designed to reward providers for improving the total cost and quality of care for a defined patient population. Providers voluntarily working under shared savings get paid for each procedure they perform, and many receive bonus income for reducing total spending on attributed patients below a predetermined target.

Providers can succeed only under a shared savings model by reducing their spending growth for plan beneficiaries, meaning that they must bill for fewer services over time. To achieve a sustainable reduction in demand, providers must collaborate to improve care management and care coordination for populations, focusing on the total cost of care across settings.

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