© 2022 MJH Life Sciences and Managed Healthcare Executive. All rights reserved.
© 2022 MJH Life Sciences™ and Managed Healthcare Executive. All rights reserved.
Our survey results reflect the reality that American healthcare is inching not galloping to value-based care.
The idea of value-based has been circulating in American healthcare for more than a decade. The ACA’s signature effort to break away from fee for service, the Medicare Shared Savings Program ACOs, started in 2012. The CMS has launched numerous programs designed to calibrate payment value (lower cost care that is of the same or superior quality). The results have been meh: modest savings, some improvement in the metrics designed to measure quality (although whether they really do is another question). The billions of dollars flowing through American healthcare are still channeled mainly through fee for service.
The results of our State of the Industry reflect the tortoise pace of the transition to value-based care. One in 4 (27%) of the 91 respondents to the question about how far along their organization was in the shift away from fee for service to value-based care indicated that the shift hadn’t started yet, and 19% said of the respondents said it was limited to a few cost-only initiatives.
One of the critiques of the current value-based efforts is that they don’t require enough from providers. Many arrangements only include bonuses (“upside risk”) for beating quality and financial benchmarks. According to this critique, value-based care contracts need to include penalties for falling short (“downside risk’) if they are to demonstrably change behavior. Most of the respondents indicated that by the end of the year they expect that less than half of their contracts will include downside risk and 41% said that expect that 25% or less will include downside risk.