6 Essential Differences Between Gainsharing and Shared Savings Programs

With many approaches being considered by hospitals to engage physicians and align incentives we often get questions on the differences between shared savings and gainsharing.  We were excited when Becker’s Hospital CFO released on September 23, 2014 an article called “6 essential differences between gainsharing and shared savings programs” written by myself and AMS VP Anthony Stanowski.

While shared savings models enable insurers to decrease spending by influencing providers to direct patients to low-cost high-value services, gainsharing programs focus on aligning hospital and physician incentives to reduce inpatient hospital costs and meet quality standards.

The article examines the following differences: (1) basis of incentive, (2) impact on revenue stream, (3) risk, (4) quality & outcomes, (5) physician strategy, and (6) time until first incentive payment.  A summary table concisely analyzes the variations.  We reinforce that gainsharing and shared savings programs are often complimentary, and healthcare organizations are able to do both as the system transforms from volume-based to value-based provision of care.