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Ask Your Engagement Vendors: Are You Willing to Sign Performance-Based Contracts?


Ask your healthcare engagement and telehealth partners if they’re willing to guarantee performance.

Insights from John Erwin, CEO, and Mick Mazour, President
Carenet Health

As value-based care reorients the nation’s healthcare system around quality and cost-effectiveness, stakeholders in every corner of the market are facing unprecedented challenges and opportunities—including how partnerships and contractual arrangements are structured.

“With the migration to value-based payment models between payers and providers, forward-thinkers in the industry should also be rethinking how they do business with their service providers,” says Carenet President Mick Mazour. “Traditional pricing mentalities must be challenged.”

Carenet CEO John Erwin agrees. “To elevate our healthcare system and deliver greater value, we must think and act differently. We’re going to see a lot more testing of innovative, experimental business models as everyone works toward improving clinical, financial and experience outcomes.”

Mazour believes that as the industry shifts, more and more healthcare engagement and other service providers will be required to assume risk based on performance agreements.

The Value of Performance-Based Agreements for all Stakeholders

Erwin and Mazour also agree that performance-based agreements immediately align and reward both parties based on mutually agreed upon goals. They can also lead to higher quality and more efficient care—ultimately boosting member/patient satisfaction, health outcomes, cost-savings and revenue.

Critical First Steps

For performance-based agreements to be successful, the program goals must be clearly defined and outcomes must be measurable.

Data collection, sharing and evaluation processes need to be determined upfront and supported by the appropriate IT infrastructure. And trust and transparency between partners is essential.

“Before entering into an agreement, it’s critical for both parties to examine the data and be transparent about the value of the payer’s current results and the financial impact when these results are improved through engagement with the service provider,” says Erwin. “This requires a very disciplined approach and a thorough understanding of the downstream value of the outcomes a program generates.”

For a deeper discussion of performance-based healthcare engagement contracts, reach out to us.