Redesigning care delivery in response to a high-performance network: The Virginia Mason Medical Center

We examine how an integrated delivery system responded to threatened exclusion from an insurer's high-performance network by attempting to reduce costs through fundamental redesign of care processes. Some factors facilitating this transformation, such as its structure as a large salaried medical group exclusively affiliated with a hospital, might be specific to the organization and its market. Other essential elements could be replicated. But in a fee-for-service payment system, cost reduction from reducing the number of services or changing their mix can reduce profitability. Making the business case for sustaining desirable provider behavior may require that purchasers and plans make equally fundamental changes in payment policy.