Strange Bedfellows: A Local Insurer/Physician Practice Partnership to Fund Innovation

Despite an unprecedented urgency to control healthcare costs while simultaneously improving quality, there are many barriers to investing in quality improvement. Traditional fee-for-service reimbursement models fail to reward providers whose improved processes lead to decreases in billable clinical activity. In addition, providers may lack the necessary skills for improvement, or the organizational infrastructure to conduct these activities. Insurance firms lack incentives to invest in healthcare delivery system improvements that lead to benefits for all patients, even those covered by competitors. In this article, we describe a novel program in its sixth year of existence that funds ambulatory care improvements through a collaborative partnership between a local academic healthcare delivery system and an insurance firm. The program is designed as a competitive grant program and the payer and healthcare organization jointly benefit from completed improvement projects. Factors contributing to the ongoing success of the program and lessons learned are discussed in order to inform the potential development of similar programs in other markets.