Research Outline

Healthcare Payors' Risk Management Approach


Obtain insights on how payors such as BlueCross Blue Shield identify and manage risk. Determine the strategies that they employ. Determine also how payors react to providers who offer to share or incur risk. The information will be used to formulate a strategy to promote a substance abuse provider services for a commercial payer.

Early Findings

Healthcare Payors' Risk Management Approach

  • Payors usually get help from healthcare risk managers to identify risks. These risk managers analyze data and apply their industry and institutional expertise to detect threats and possible compensatory situations.
  • The risk managers can then help the payors and other healthcare players to assess and prioritize the identified risks to encourage collaboration and determine the best way to tackle the risks.
  • Action plans to tackle sentinel situations or unexpected critical events in a healthcare setting are usually in place to enable rapid response and diligent investigation to minimize future risks.
  • Maintaining records of "near misses and good catches" are usually practiced to pinpoint and manage risks.
  • Risk management plans, contingency plans, reporting protocols, and response plans are also drafted within healthcare organizations to minimize liability claims, sentinel instances, near misses, and the total cost of the risks to the organizations involved.
  • To successfully manage risks, payers are exerting more effort to capture and analyze relevant data. Gaining insights from these data points can enable them to uncover more opportunities and deploy solutions to support new approaches such as empowering their providers to thrive in shared risks.
  • Based on the California Regional Health Care Cost & Quality Atlas, sharing financial risks among healthcare players can result in the reduction of the total costs of care by 3.5%.
  • Based also on the study, players in risk sharing agreements in California also got a 9.2 percentage points higher rating on "average clinical quality performance rates" than those who are on "no risk via fee-for-service."

Blue Cross Blue Shield of Michigan’s (BCBSM) Risk Approach Initiative

Summary of Findings

  • Our one hour of research provided insights on how payors such as BlueCross Blue Shield identify and manage risk.
  • Based also on some agreements found, payers and providers both benefit from risk-sharing arrangements so we concluded that this is favorable for payors.
  • As there was no geographic focus provided to us, we have assumed this to be US-focused. If a more broad approach is desired, for example, a global focus, this would have to be clearly communicated to us in any reply.