Tag: Risk Bearing

Transitioning to Risk- Getting Over the Straddle

This week I gave a presentation on “transitioning to risk” at a great meeting with a large group of seasoned healthcare executives in Nebraska. One of the points I made was this:  it is important to remember that when transitioning to risk from fee-for-service, a healthcare organization has to expect a period of poor financial performance before the financial ...

Why Value Generation Doesn’t Grow Your Risk-Bearing Medical Group: On Being Foiled by the Middleman

Imagine that you are an electronics manufacturer who has figured out how to build a superb stereo system at a far lower cost (20% less) than your competitors. Over time you’ve perfected the system, created a reputation for high quality and have a machine that sounds great.  Your manufacturing efficiencies position you to sell at ...

Pricing Risk: What Margin Should Risk-Bearing Healthsystems Reasonably Expect?

There is an old adage in the business world: reward follows risk. In other words, in an ideal market, investors are supposed to balance the potential returns of an investment against the possibility that they’ll lose their money. I’ve thinking a lot about risk recently as our organization came to the end of our budget ...

Structure Follows Strategy: What’s the Best Organizational Model for Capitated Healthcare Systems?

“Structure follows strategy” is an old business motto coined by the business historian Alfred Chandler. The adage refers to Chandler’s observation that organizational structures should change to reflect an organization’s evolving corporate strategy. As strategy evolves, so too should the organizational structure. 

Risk-Bearing Contracts Are Pushing Health Systems Into Adjacent Areas of Business– With New Back Office Needs

An recent interesting HBR blog discusses what I think is an important lesson for health systems migrating to risk-bearing insurance contracts.