Every day, your health system makes thousands of operational decisions—referrals, scheduling, site of care, discharge planning. What if each decision could simultaneously optimize for quality, patient experience, and margin across every one of your payment contracts?
This isn’t just a future vision. While leading health systems are already applying some contract-aware strategies, the true solution is integrating intelligence across all contracts – transforming payment complexity into a true competitive advantage.
What Contract-Aware Optimization Actually Means
Contract-aware optimization means every operational decision, from initial referral through post-acute care, is informed by real-time intelligence about its financial and clinical impact across all payment models.
Here’s what it looks like in practice: When your primary care physician refers a Medicare patient for joint replacement, the system can recognize that this patient triggers a CMS TEAM bundle and surfaces insights — such as which orthopedic surgeon consistently delivers the best outcomes at the lowest episode cost, the optimal site of service, and post-acute pathways most likely to reduce readmissions while supporting margin goals.
The same intelligence works across your entire book of business. That commercial patient? The system accounts for narrow network requirements and steers to in-network specialists who meet quality thresholds. That Medicare Advantage patient? It optimizes for HCC capture opportunities and shared savings arrangements.
What’s Possible: Three Illustrative Use Cases
To illustrate how contract-aware optimization could transform operations, here are three potential use cases based on common health system challenges.
- Referral Optimization: Imagine a health system with a 400-bed flagship hospital using contract-aware referral routing. By directing patients to high-performing, in-network specialists, the system could reduce specialist leakage by 18%—protecting revenue under fee-for-service contracts—and improve bundle performance by $3,100 per episode for value-based arrangements. The key is giving referral coordinators visibility into how each decision affects both network integrity and contract economics.
- Surgical Scheduling: Consider a system that shifts appropriate cases from its main hospital to an ambulatory surgery center when clinically appropriate and contractually advantageous. This approach could generate $4.2M in additional margin annually—without new volume or service cuts.
- Post-Acute Navigation: Under CMS TEAM, a single readmission can erase an entire episode’s margin. A system using predictive analytics to match patients with optimal post-acute settings could reduce 30-day readmissions by 22%, based on historical performance data.
Why Traditional Approaches Fall Short
Most health systems still operate with fundamental blind spots. Your managed care team optimizes commercial contracts. Population health manages risk arrangements. Service lines chase volume. Finance tries to reconcile it all in retrospective reports.
But today’s reality demands real-time, unified intelligence. Consider that the same knee replacement might be profitable under your Blue Cross contract, marginal under Medicare Advantage, and a significant loss under TEAM—depending entirely on your operational choices.
Manual tracking can’t keep pace. By the time your teams identify optimization opportunities in monthly reports, you’ve already lost millions.
The TEAM Catalyst: Why Contract-Aware Strategies Can’t Wait
Starting in 2026, CMS TEAM becomes mandatory for five surgical episodes in 741 acute care hospitals across 188 markets. Unlike previous voluntary bundles, there’s no opt-out. Hospitals must manage the total cost of care from surgery through 30 days post-discharge.
But here’s what forward-thinking CFOs realize: TEAM isn’t just another compliance requirement. It’s a proving ground for the contract-aware capabilities you’ll need as alternative payment models reach 50% of revenue by 2030.
Systems building these capabilities now are seeing immediate returns. For example, a large academically affiliated medical center has identified $22.3M in upside revenue opportunity via strategic operational moves within CMS TEAM, while a regional, mid-sized community health system is set to capture $8M in referral recovery in year 1 with $750K in gainsharing over 3 years (15x ROI on their capability investment)1.
Building Your Contract-Aware Operating System
The transformation requires three integrated components:
- Unified Intelligence Layer – Aggregate your claims, clinical, and contract data into a single source of truth. This isn’t another dashboard—it’s an active intelligence system that powers real-time decisions across your enterprise.
- AI-Powered Optimization Engine – With thousands of variables affecting each patient journey, human analysis alone isn’t feasible. Machine learning models can process complex interactions between clinical protocols, payer rules, provider performance, and network requirements to identify optimal pathways.
- Workflow-Embedded Insights – Intelligence must reach the point of decision. Whether it’s a referral coordinator’s screen, a scheduler’s queue, or a discharge planner’s tablet, contract-aware recommendations should be seamlessly integrated into existing workflows.
The Path Forward Starts Now
Health systems face a choice: continue managing payment complexity through spreadsheets and siloed teams – losing millions to suboptimal decisions – or embrace contract-aware optimization as your strategic advantage.
The winners won’t be those with the most favorable contracts or the highest volumes. They’ll be the systems that make every operational decision with full visibility into its clinical and financial implications.
Start with a focused pilot—perhaps TEAM preparation or referral optimization within a single service line. Prove the model, quantify the impact, then scale across your enterprise. The technology exists. The data is available. The only question is whether you’ll lead this transformation or follow it.
About Clarify Health
Clarify Health is pioneering contract-aware optimization, processing over 300 million patient journeys to deliver actionable intelligence for health systems nationwide. Our platform transforms payment complexity into competitive advantage.
Ready to evaluate your contract-aware readiness? Contact us at info@clarifyhealth.com for a complimentary assessment of your optimization opportunity.
1 Blinded case studies from Clarify customers deploying TEAM IQ
