A challenge facing providers and payers is to design shared risk payment models that incentivize providers to deliver efficient, high-quality care without assuming too much insurance risk from payers. Providers and payers should be measuring insurance risk when assessing the viability of a risk-sharing contract and creating appropriate risk contracting parameters to mitigate that risk. These pricing exercises should be approached with appropriate actuarial rigor.

This report was originally published by the Society of Actuaries.