More than 58% of healthcare payers’ businesses have already shifted to full value-based reimbursement models, a 10% increase since 2014.
More than 58% of healthcare payers’ businesses have already shifted to full value-based reimbursement (VBR) models, according to a new national study of 465 US payers. This represents a sharp 10% increase since 2014, suggesting that value-based payments are becoming the norm. The study, “Journey to Value: The State of Value-Based Reimbursement in 2016,” was commissioned by McKesson.
Hospitals report they are now 50% of the way along the value continuum, a 4% increase in the past 2 years. The company’s 2014 survey had suggested that fee-for-service was projected to be eclipsed by payment models using measures of value by 2020. The 2016 study finds that the speed of disruptive change in healthcare payment has not slowed, and the complexity of putting into effect alternative payment models remains a tremendous challenge for payers and providers.
McKesson concluded that the data underscore the importance of the market that payers and providers operate within: those in collaborative, provider-centric, or payer-centric regions were further along the continuum to full VBR than those in fragmented regions where there is little or no collaboration.
The study forecasts that bundled payment is projected to grow fastest (6%) over the next 5 years, edging ahead of capitation and shared risk growth. A total of 59% will be a mix of capitation/global payment, pay-for-performance, and episodes of care/bundled payment. Although both hospitals and payers expect bundled payment will account for 17% of medical payments in 5 years, only half of payers and 40% of providers say they’re ready to implement bundles. Only one-fourth say they have the tools to automate these complex models.
Payers have dramatically shifted their network strategy, so that more than 60% of payers have changed network strategy since 2014, with 53% using tiered and 42% using narrow networks. More than 80% say they’re more selective about the hospitals in their networks, with 75% of payers saying quality of care is the top driving factor.
Sixty-three percent of hospitals surveyed said they were part of an accountable care organization (ACO), up 18% since 2014. Of the hospitals that are not part of an ACO, 47% expect to join and ACO within 5 years. Being part of an ACO is considered to be an indicator of alignment with VBR models.
The survey found that 57% of hospitals reported they are a health plan, the same percentage since 2014. Of those, 30% offer the plan to employees only (versus 29% in 2014); 27% also offer a plan to the general population, up from 21% in 2014. The number of providers who said they are not a health plan (42% versus 48%) was significantly less than 2014. Of hospitals not offering a health plan, 19% say they plan to become one within 5 years.
“Payers and providers are clearly beginning to scale VVR,” Rod O’Reilly, president of McKesson Health Solutions, said in a statement. “The swift pace of change, coupled with the daunting complexity of these payment models, is putting extreme pressure on the healthcare system.”
The ability for payers and providers to automate the complexity inherent in these models will be a deciding factor to success, he concluded.
Study Highlights Significant Increases in Utilization, Spending on DMD Drugs in Medicaid
May 17th 2024The findings add to recent research on the growing utilization, expenditure, and prices of Duchenne muscular dystrophy (DMD) therapies in the current landscape, an area health care policy could potentially address.
Read More
Frameworks for Advancing Health Equity: Urban Health Outreach
May 9th 2024In the series debut episode of "Frameworks for Advancing Health Equity," Mary Sligh, CRNP, and Chelsea Chappars, of Allegheny Health Network, explain how the Urban Health Outreach program aims to improve health equity for individuals experiencing homelessness.
Listen
Panel Addresses Minority Physician Shortage, Maternal Health at Senate Committee Hearing
May 15th 2024The senate hearing held by the US Senate Committee on Health, Education, Labor, and Pensions, led by Sen. Bernie Sanders (I, Vermont), chairman of the committee, and ranking member Sen. Bill Cassidy, MD, (R, Louisiana), addressed the critical issue of physician and health care worker shortages, as well as the maternal health crisis, in the US.
Read More
Examining Low-Value Cancer Care Trends Amidst the COVID-19 Pandemic
April 25th 2024On this episode of Managed Care Cast, we're talking with the authors of a study published in the April 2024 issue of The American Journal of Managed Care® about their findings on the rates of low-value cancer care services throughout the COVID-19 pandemic.
Listen
A new study highlights significant disparity in reimbursement rates across states between hospitals and Medicare; the first patient to receive a genetically modified pig kidney has died; research examines outcomes of over 500 patients receiving medication abortion pills by mail.
Read More