With spiraling cost inflation and outcomes that lag many other developed economies, the US government’s healthcare insurance authority (CMS), is driving reform aimed at better quality and lower cost, and private payers are following suit.

Both state and private payers are moving toward alternative payment models, like value-based payments, that make providers accountable for cost and quality.  Such arrangements obligate providers to manage against agreed-upon quality criteria and pre-set cost targets in return for a share of potential savings and increasingly, financial risk for missing them. Consequently, providers are beginning to look for ways to spread their risk by adopting value-based contracts (VBCs) with manufacturers.

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