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Report: Value-Based Care Strategies Effective, but Payers Struggle to Roll Them Out Quickly

Laura Joszt
A national study of 120 payers has found that nearly two-thirds of payments are now based on value, and value-based care is helping stakeholders to achieve the triple aim of lower costs, improved health, and better patient experiences.
A national study of 120 payers has found that nearly two-thirds of payments are now based on value, and value-based care is helping stakeholders to achieve the triple aim of lower costs, improved health, and better patient experiences.

The “Finding the Value: The State of Value-Based Reimbursement in 2018” report from Change Healthcare found that accountable care organizations (ACOs) are the value-based care strategy with the most maturity. Nearly half (48%) of respondents have established an ACO, with 24% growing one, 13% in a pilot, and 5% in the planning stages.

According to the report, all respondents reported some medical cost savings, with the majority reporting savings of at least 5%—37% reported savings between 5% and 7.49% and 24% reported savings of 7.5% or more. The average impact from value-base care strategies on medical cost savings was 5.6%.

As value-based strategies grow and continue to impact medical costs, fee-for-service is fading faster than expected, according to the report. Pure fee-for-service is projected to dip below 26% of reimbursement in just 3 years.

While up to half of payers found episode-of-care models very or extremely effective at improving care quality, and episode models delivered savings of 5% to 5.4% on average, payers have been struggling to engage providers in episode-of-care programs. Change Healthcare found 58% said it was extremely or very difficult to gain agreement on contracted budgets and risk/gain sharing; 51% found it extremely or very difficult to gain agreement on episode-of-care performance metrics/reports; 48% found it extremely or very difficult to engage providers to consider participating in an episode-of-care contract; and 43% found it extremely or very difficult to gain agreement on episode definitions and inclusion criteria.

"Payers are finding the positive impact of value-based care as they scale these models—particularly episodes of care—and that's starting to bend the cost curve in a significant way," Carolyn Wukitch, senior vice president and general manager, Network and Financial Management, Change Healthcare, said in a statement. "However, the demand to innovate at the pace of change is challenging payers. They lack satisfactory analytics and automation to better engage providers, operationalize their models, and assess effectiveness overall.”

Innovation agility remains an issue. More than a third of payers said they need up to a year to launch a new episode-of-care program, 21% need up to 18 months, and 13% need 24 months or longer. According to Change, this is more than enough time for conditions to have changed in the healthcare market. Only 24% said they could roll out a new program in less than 6 months.

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