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Monday, June 12, 2017 - What is the Roper St. Francis Health Alliance and why it matters to you

We are proud that your practice is part of the Roper St. Francis Health Alliance.

The alliance was formed in 2015 as a clinically integrated network (CIN).

The Roper St. Francis Health Alliance includes more than 750 Lowcountry physicians and is governed by a 16-member, majority-physician board. Half of Roper St. Francis Health Alliance board members are independent community physicians.

One of the biggest benefits we will provide your practice is support through the transition from fee-for-service to value-based payment. Our mission is to “enable and empower providers to deliver coordinated, proactive healthcare of the highest quality,” and our vision is to be the “most trusted healthcare network in the Lowcountry.”

As a CIN, the alliance is able to enter into population-level, risk-based shared savings contracts with payers and local employers. The Roper St. Francis Health Alliance has three such contracts this year: one to serve Boeing teammates and their families, one to serve Roper St. Francis teammates and their families and one to serve local Medicare beneficiaries who use RSF Health Alliance providers for the majority of their healthcare needs. The CIN serves a total of approximately 45,000 Lowcountry residents under these three contracts.

These contracts generally work as described below.

  • For a given population, an actuary, which is an analyst for insurance products, uses historical claims costs (medical and pharmacy) to project future year costs. The estimated claims cost becomes the CIN’s target cost.
  • CIN providers typically are eligible for shared savings if they keep total claims costs below target and meet quality metrics.
  • CIN contracts do not impact independently negotiated fee for service rates. Providers continue to independently negotiate their own FFS rates with carriers. Shared savings are calculated on an aggregate population level.
  • Below is a very basic depiction of CIN contract math*: 

A. Base year (historical) healthcare costs

$50 million

B. Estimated contract year healthcare costs

$55 million

C. Actual contract year healthcare costs

$52 million

D. Gross shared savings

$3 million (A minus B = C)

E. Quality metric score (the aggregate annual score for quality all metrics included in the contract)

90 percent

F. Net savings

$2.7 million (D multiplied by E)

*This is a hypothetical example. The depiction above is a grossly oversimplified example meant to illustrate basic concepts. It doesn’t depict core CIN contracting elements such as converting costs to a per member per month basis (PMPM), how to estimate and project annual percentage increases in claims expense, accounting for a minimum savings rate to negate expected random fluctuations in claims expense or adjustments for outlier high cost members.

We look forward to providing you with more information about our contracting, budgeting and clinical initiatives in future newsletters. If you have any questions in the meantime, please contact us.

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