Big ideas: Outsourcing improvement: The relationship between vendor contracts and provider performance

[HealthLeaders Magazine, January 01, 0001] When Allina Health, the $3.7 billion health system headquartered in Minneapolis, signed a $100 million deal with Health Catalyst at the start of this year, the terms of the deal were unusual, to say the least.

As part of the agreement, Health Catalyst—a Salt Lake City–based health IT vendor founded by former Intermountain Healthcare leaders that provides data warehousing, analytics, and outcomes improvement—took dozens of Allina employees onto its payroll, and Allina received a tantalizing potential upside. About 20% of the contract cost is dependent on better outcomes and lower costs at Allina hospitals and clinics. In essence, Allina's vendor partner proposed to share some of the risk that its technology would pay off.