With a new deal between Pittsburgh’s influential payer/provider networks, UPMC Health and Highmark Health/Allegheny Health Network, smaller integrated delivery networks are reacting to the payer/provider networks’ dominance by focusing on niche services. Independent IDNs partner with UPMC or AHN to offer cancer care but focus on their surrounding communities to offer emergency services and population health programs. National insurers contract with both UPMC and AHN to offer broad-access products. Highmark and UPMC are fast-tracking value-based contracts through their insurance arms. Pittsburgh is an important test market for outcomes-based drug contracts since Highmark and UPMC have negotiated deals that tie results to payment. Expect risk-sharing to grow in 2020, as Highmark and UPMC use their clout to move a larger percentage of providers to the next level of payment reform.

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