What is risk and benefits sharing of integrated care?
Risk and benefits sharing is a management method of sharing risk and reward between members of a group by distributing gains and losses on a predetermined basis.
Gains and losses are determined by the difference between target outcome expectations and the actual resulting outcome. The NHS already employs some models of this nature, such as CQUIN incentive payments.
CQUIN stands for commissioning for quality and innovation. The system was introduced in 2009 to make a proportion of health care providers’ income conditional on demonstrating improvements in quality and innovation in specified areas of patient care.
Another way to look at risk and benefits sharing is by asking two questions:
- How can we incentivise better system outcomes?
- What happens if our plans don’t materialise?
This guide has been updated to reflect the nature of joint working and the need for the wider system to share both risks and benefits. It is important to focus on the positive aspects of pooling resources to improve the system, while being clear about the associated risks and how to manage them.
Why is risk and benefits sharing important?
The goal of integrated care is to improve the health and wellbeing of the population as well as of the practitioners and care staff who support that population. This is achieved by optimising the benefits of shared resources. Sharing resources between different organisations requires a risk and benefits mechanism to enable this approach to work on a day-to-day basis, and also to incentivise organisations to deliver shared goals and outcomes.
Risk and benefits share ‘flow’ is generally articulated in financial terms, as it is the tangible ‘currency’ when it comes to contribution (when organisations contribute to a shared pool) and payout (when a financial benefit is realised). There are other risks and benefits that form part of local integrated and Better Care Fund plans that are articulated in other measures (e.g. patient and staff satisfaction). Traditional payment approaches and mechanisms may present conflicting incentives that may pose barriers for integrated care. Risk sharing agreements can support the alignment of financial incentives with common goals. Best practice for successful integrated systems indicates that there should be an agreed approach to financial risk sharing and contingency.
Advantages of risk and benefits sharing
Unprecedented increases in demand and financial austerity have meant that it is ever more important that health and care organisations partner and pool their resources to achieve better value and outcomes for patients and families. This requires the partnership to be clear about the relative risks and benefits of each participating organisation. Therefore risk and benefits sharing is a key component that underpins the success of this. Contract incentives, such as CQUIN, are relatively straightforward – providers are paid a certain amount of money if outcomes are achieved which benefits both provider and the commissioner. As local systems progress their plans for integration, including devolution arrangements and ICSs – the risk (e.g. failure of delivery) and benefits (e.g. savings from shared staffing) arrangements become more complex as the number of organisations and scope increases. Across the country, in many different forms and guises such as Better Care Fund, joint commissioning, integrated care organisations, ICSs – many local health and care systems are pooling their resources to improve the outcomes for their population, working across the NHS, local authorities and voluntary and independent sector organisations. Pooling resources and optimising value is integral to successful health and wellbeing systems internationally.
The opportunities of risk and benefits share agreements include:
- opportunities for better alignment of resources with population needs without creating extra risk for individual organisations
- enabling a focus on outcomes and delivery for the whole health and social care system rather than focus on individual organisations
- an opportunity to align risks with system resilience plans
- an opportunity for providers to align their incentives with the rest of the system.