Definitions for "Risk Sharing"
Is a financial arrangement between the HMO and its providers whereby the provider shares some of the loss if an HMO’s utilization or medical costs cause an unexpected operational deficit. The provider also shares in the profits.
The distribution of financial risk among parties furnishing a service. For example, if a hospital and a group of physicians from a corporation provide health care at a fixed price, a risk-sharing arrangement would entail both the hospital and the group being held liable if expenses exceed revenues. A method by which medical insurance premiums are shared by plan sponsors and participants. In contrast to traditional indemnity plans in which insurance premiums belonged solely to insurance company that assumed all risk of using these premiums. Key to this approach is that the premiums are only payment providers receive; provides powerful incentive to be parsimonious with care.
A method by which the risk of inaccurate rate adjustment is shared by plan sponsors and purchasers, typically managed care organizations and states. In contrast to traditional indemnity plans, in which insurance premiums belong solely to the insurance company that assumes all risk of providing the care paid for by these premiums.