Provider collaboratives: Working together to navigate the changing health care delivery system

The word collaborate originates from the Latin word collaborare, “to labor together.” Collaboratives – organized groups or entities that work together towards a particular goal - are not a new concept in the health care industry, but they have been increasing in number over the past few years. Are provider collaboratives actually meeting their goals, or a fad that will go away? Are they helping health systems compete in today's changing payment landscape? What makes a provider collaborative successful?

Deloitte analyzed nine provider collaboratives' track records to answer these important questions. Our research found that, after investing appropriate time and resources into forming a collaborative, many are starting to see progress against stated goals and are evolving to expand their scope. Many collaboratives are attractive to hospitals and health systems which are evaluating options to remain independent yet gain scale-related benefits; among these are cost savings ranging from tens to hundreds of millions of dollars from supply chain optimization and better resource utilization. Other benefits can include building the right foundation to participate in value-based care (VBC) models, or improve population health, share best practices, and engage in advocacy efforts.

Both “early days” collaboratives and those that are more established recognize that the road to success can be a lengthy one, and that success does not happen overnight. And, not all collaboratives result in lasting relationships. Some have attempted to align, but failed and chosen to dissolve. From our interviews and analysis we learned some important lessons for building a strong, sustainable provider collaborative:

• Having the right team with the right skills is critical, and engagement and buy-in must come from the top. CEO support and participation is necessary for collaboratives to endure.
• Success doesn't happen overnight. Patience, persistence, flexibility, and a long-term vision are essential.
• Strong collaboratives are dynamic. Many begin with one set of goals that shift over time.
• Cost savings are important, but achieving value or return on investment (ROI) from a provider collaborative extends to strengthening relationships, learning best practices, gaining clinical improvements, and creating a unified, more powerful voice.
• Collaborative members value the relationships they've built and see them as a defense strategy against future challenges in the changing health care market.

Our view is that provider collaboratives will continue to evolve, shaped by market forces, health care's transition from volume to value, and providers' desire to gain scale benefits and maintain local governance/control. Collaboratives can provide the necessary infrastructure and capabilities that many providers need to participate in value-based care, and can lay the groundwork for identifying clinical and cost improvements. Health systems' desire to remain independent and focus on their communities is unlikely to go away. Collaboratives can offer an attractive option for health systems to do this by maintaining local governance.

Read more in: Provider collaboratives: Working together to navigate the changing health care delivery system