Mercy Taps Payer Veteran Paul Davis to Helm Contracting Strategy

ST. LOUIS, MO – January 15, 2026 – In a strategic move that underscores the shifting dynamics between healthcare providers and insurers, Mercy has appointed Paul Davis, a seasoned executive from the payer side of the industry, as its new president of contracting and managed care. The appointment, effective January 19, brings an individual with decades of experience at giants like Humana and UnitedHealth Group into a pivotal role at one of the nation's 15 largest health systems.

Davis will now lead Mercy's comprehensive strategy for payer relations and contract negotiations across its vast multi-state network. His mandate is clear: to enhance provider networks, expand the system's already successful value-based care programs, and secure agreements that bolster Mercy's long-term growth and financial stability. This move is widely seen as a proactive step to navigate the increasingly complex and often contentious landscape of healthcare reimbursement.

A Payer's Perspective in a Provider's World

What makes Davis's appointment particularly noteworthy is his extensive background within the insurance industry. He most recently served as national vice president of network development and contracting at Humana, where he guided strategy for the company's massive Medicare, Medicaid, and Employer Group segments. During his tenure, he was credited with a focus on aligning financial incentives with provider partners, simplifying the patient journey, and—critically—minimizing "provider abrasion," the industry term for the friction and administrative burdens that often strain payer-provider relationships.

This experience provides Davis with an insider's understanding of payer motivations, negotiation tactics, and strategic priorities. For a provider system like Mercy, this perspective can be a powerful asset at the bargaining table, potentially transforming adversarial negotiations into more collaborative partnerships.

"Paul has a unique talent of untangling complexity and delivering progress for patients," said Dave Thompson, Mercy's senior vice president and chief growth officer. "His expertise in aligning strategic goals and simplifying the patient experience will strengthen Mercy's relationships with payers and providers while advancing Mercy's mission of compassionate care."

Davis's track record also includes executive roles at Cook Children's Health Care System, PacificCare, and Texas Health Resources, where he consistently delivered strong operational and financial results. His dual qualifications, holding both a Juris Doctor and a master's degree in health care administration, equip him to navigate the intricate legal and operational facets of modern healthcare contracting.

Doubling Down on Value-Based Care

Davis is not joining an organization new to innovation. He steps in to lead a division at Mercy that already oversees one of the country's largest and highest-performing Accountable Care Organizations (ACOs). An ACO is a group of doctors, hospitals, and other providers who collaborate to give coordinated, high-quality care to their patients, with financial incentives tied to improving health outcomes and reducing costs.

Mercy's ACO has been a standout success. In the last seven years alone, it has saved taxpayers an estimated $463 million while consistently earning top marks for quality of care. In 2024, it saved $103 million for Medicare and ranked in the top three for quality among the ten largest ACOs in the United States. With approximately 50% of its contracts already structured around value-based principles, Mercy has long been a proponent of moving away from the traditional fee-for-service model that rewards volume over outcomes.

The hiring of Davis, an expert in value-based program innovation, signals a clear intention to accelerate this transition. His experience at Humana in developing these models from the payer side will be invaluable as Mercy seeks to expand these arrangements across its commercial and government contracts.

"I'm honored to join Mercy and help advance Mercy's vision for high-quality, patient-centered care," Davis stated. "Mercy has one of the highest performing ACOs in the country and together I know we can continue to grow Mercy's success in both value-based and traditional care models."

Navigating a Shifting Healthcare Landscape

Davis's appointment comes at a critical juncture for the U.S. healthcare industry. The Centers for Medicare & Medicaid Services (CMS) has set an ambitious goal for all traditional Medicare beneficiaries to be in a value-based care relationship by 2030. This federal push, combined with relentless financial pressures on both payers and providers, is forcing health systems to rethink their entire business model.

Achieving success in this new environment requires more than just clinical excellence; it demands sophisticated data analytics, seamless care coordination, and a willingness to share risk with insurance partners. However, the path is fraught with challenges, including fragmented data systems, a lack of transparency from some payers, and the immense administrative burden of managing complex contracts. Davis's role will be central to overcoming these hurdles, leveraging technology and fostering trust to build the sustainable partnerships necessary for population health management.

A Legacy of Growth and a Path Forward

This leadership transition also marks a moment of continuity. Davis succeeds the retiring David Ott, whose tenure was instrumental in building the very foundation upon which Davis will now expand. Ott is credited with strengthening Mercy's contracting strategies, forging new partnerships, and guiding the organization through significant growth.

"We're deeply grateful for David's leadership and dedication," Thompson remarked. "His contributions have strengthened Mercy's contracting strategies, value-based care agreements and elevated the standard of care for countless patients."

Davis, therefore, inherits a strong and successful program, with a mandate to elevate it further. His leadership will be crucial as Mercy, a system with 55 hospitals and over 50,000 caregivers, continues its mission across Arkansas, Illinois, Kansas, Missouri, and Oklahoma. By bringing a payer's acumen into the heart of its provider strategy, Mercy is making a calculated play to not only adapt to the future of healthcare but to actively shape it.