Many large medical groups will need to acquire new skills and tools to be ready for payment reform.

Federal and state policy makers are now experimenting with programs that hold health systems accountable for delivering care under predetermined budgets to help control health care spending. To assess how well prepared medical groups are to participate in these arrangements, we surveyed twenty-one large, multispecialty groups. We evaluated their participation in risk contracts such as capitation and the degree of operational support associated with these arrangements. On average, about 25 percent of the surveyed groups' patient care revenue stemmed from global capitation contracts and 9 percent from partial capitation or shared risk contracts. Groups with a larger share of revenue from risk contracts were more likely than others to have salaried physicians, advanced data management capabilities, preferred relationships with efficient specialists, and formal programs to coordinate care for high-risk patients. Our findings suggest that medical groups that lack risk contracting experience may need to develop new competencies and infrastructure to successfully navigate federal payment reform programs, including information systems that track performance and support clinicians in delivering good care; physician-level reward systems that are aligned with organizational goals; sound physician leadership; and an organizational commitment to supporting performance improvement. The difficulty of implementing these changes in complex health care organizations should not be underestimated.