Managed care contracting has become one of the most critical and complex levers for financial sustainability for health systems. At its core, managed care contracting involves agreements between healthcare providers and insurance companies to deliver services with an often conflicting incentive mix of negotiated reimbursement rates and value-oriented cost and quality incentives. However, antagonistic relationships, outdated contracting strategies, and fragmented operations often leave health systems ill-equipped to negotiate favorable contracts or successfully execute the terms of those agreements.

This article explores the challenges health systems face in managed care contracting, outlines the key changes required, and spotlights a solution to help organizations take more control of their contracting strategies and outcomes.