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2 strategies used by independent groups to succeed in commercial risk

By Laura CharneyEliza Dailey

May 24, 2022

What does it take to succeed in commercial risk? We posed this question to a group of our most progressive independent physician executives. Like Medicare risk, independent groups have been early adopters in the commercial space, allowing other stakeholders to learn from their experiences. Here are two early moves they're making to succeed in commercial risk.

The data on commercial risk opportunities (and where the research goes next)

1. Site-of-care shifts

Commercial patients are generally healthier than the Medicare population. At the same time, there's usually a shorter time horizon to bring down costs due to frequent churn in commercial contracts. While investing in preventive services like annual physicals is important, cost savings are often realized years later—sometimes when the patient is under the care of another provider or plan.

To quickly control costs, independent groups are focusing on site-of-care shifts by building 24/7 urgent care centers near emergency departments, extending the hours of primary care offices, and creating physician compensation incentives. They're also actively partnering with other stakeholders, like hospitals, to invest in ASCs and other lower cost care settings.

2. Direct-to-employer contracting

Many independent groups who are serious about commercial risk are in markets with a dominant payer—both a blessing and a curse. While this enables independent groups to jump into commercial with a critical mass of patients, they often lack leverage in these arrangements, which can be difficult to sustain financially.

As a result, independent groups are beginning to explore employer contracts. This empowers practices to broker their own deals with employers that are often more flexible and advantageous. While there's great interest in the employer space, independent groups are still determining whether direct contracting, going through a third-party payer, or partnering with a vendor is the right approach. Similarly, employers are weighing whether value-based care is financially viable and worth the administrative burden.

Parting thoughts

Independent medical groups recognize that working with partners—and not just the obvious ones—will determine success or failure in commercial risk.

To build enduring cross-industry partnerships, executives must expand their focus beyond hospitals, health systems, and plans to employers, digital health companies, and other entities.

The data on commercial risk opportunities (and where the research goes next)


The health care industry is struggling to move on value-based care, and many wonder what the future will look like. But while progress is slow, Medicare is moving toward risk. Commercial risk is the wild card. Because of this, the future of commercial risk will decide if the industry lives in a hybrid state forever or realigns around a new cost and quality standard.

After examining the barriers and possibilities in commercial risk qualitatively, we dug into the top opportunities in claims data. Read more for our initial analysis.

Read more

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