As the ecosystem of healthcare delivery continues to evolve, the role of health plans is shifting. It’s a critical time for health plans to secure their position in value-based care (VBC) innovation and execution. Despite its challenges, VBC will remain a key lever for health plans to manage medical costs effectively, maintain strong provider relationships and differentiate themselves in the market.


To achieve these goals, health plans must increase VBC adoption, including expanding their footprint beyond traditionally primary care-oriented models and increasing the share of providers that assume both upside and downside risk. While targeting and engaging specialists is especially complex, tackling the large portion of spending driven by specialists is critical to realizing the full promise of VBC.

Leading health plans use provider intelligence—or a set of actionable insights and analytics to understand the providers in their markets—as a key ingredient to advance their value-based objectives. And health plans can particularly benefit from provider intelligence when building relationships with their specialist groups, as specialists are generally less experienced at managing risk and will benefit from customized contracts and engagement tactics⁠. Yet, the intelligence required to build trusting and impactful provider relationships falls short at many plans.


There’s a significant opportunity to optimize provider targeting which, in addition to directly informing provider prioritization and outreach strategy, also enables a sophisticated engagement and portfolio strategy. While health plans may have a strong pulse on the large health systems and facilities in their markets, identifying which physician groups to engage in VBC contracting often receives less attention and resources. But this can be a critical component of successful VBC arrangements.

Many health plans are not taking advantage of provider targeting because they are currently:

  • Using a narrow set of internal metrics and missing insight on ideal provider partners: Many plans struggle to obtain the comprehensive insights needed to understand their optimal VBC targets. Data sources are fragmented across operational silos, and the data that is available to plans is typically limited to that payer, providing an incomplete view of provider performance.  Even the most sophisticated plans often rely on simple cost rankings and tribal knowledge to evaluate provider partners. Other plans take an even simpler route and use an “any willing provider approach,” overlooking key performance indicators in favor of targeting already-engaged providers.
  • Gathering data from multiple data sources, which is resource- and time-intensive: Even if health plans have access to robust and sophisticated data, collecting the data available is a laborious process that requires significant administrative investment. The most successful plans understand that provider contracting is a continuous process: They must be ready to develop new partnerships and modify existing models at any time. Having the right data in hand to make these decisions is a strain on resources, forcing many plans to resort to a simplified strategy that doesn’t tell the full story. 

To illustrate how advanced provider intelligence  can shift a health plan’s view of the best VBC partners, ZS analyzed extensive provider performance data to develop a comprehensive score that supplements cost information with additional measures. This ZS partnership score metric factors the group’s opportunity size, experience with VBC programs, performance on quality measures and competitive dynamics within its market. On a scale of zero to 100, the ZS score ranks provider groups to indicate their VBC partnership potential (with 100 being the best potential).


When we compare the ranking of groups by the ZS score versus a simple ranking by total charges, we can see how cost measurement alone falls short and ignores other important factors that could influence VBC success.


As an example, the table below reflects a view of provider groups in a Midwest region ranked by both cost and ZS partnership score. We can see a significant spread in partnership scores across groups in a similar cost band. In this example, groups with lower costs but strong partnership potential may be overlooked, while the largest players in a plan’s network by cost ranking may not actually be the most compelling VBC partners. The group circled in blue would appear more obviously attractive than the group in orange, but our data reveals that the group in orange is better suited to a VBC partnership. By using a holistic set of insights, organizations will be better able to target the provider groups who will be best aligned with value-based approaches.

A provider intelligence strategy that synthesizes data across sources and captures a multifaceted snapshot of providers will help health plans target the right provider groups and align them with the best type of VBC arrangements. This approach will enable a high impact VBC portfolio and help health plans:  

  • Improve overall medical trend
  • Reduce total costs
  • Decrease administrative costs 
  • Improve quality
  • Enhance provider satisfaction

Health plans should take a proactive approach to determine where they want to grow their VBC contracts—whether it be primary care, specialists or multispecialty groups—and plan for an “intelligent,” analytics-driven approach for understanding these groups and optimizing the benefits of VBC. Focusing on internal data alone does not provide the full picture needed to inform the types of advanced partnership opportunities we believe are ultimately required in order for health plans to keep moving the needle on value creation.