Survey reveals 3 value-based payment trends to watch

The transition to value-based payment has accelerated rapidly over the past two years, and payers and providers predict even more dramatic changes.

That’s according to a new survey of 115 payer organizations and 350 hospitals conducted by ORC International and commissioned by McKesson.

The survey, which was also implemented in 2014 on a smaller scale, highlights how the movement toward value-based payment has shifted over the past two years.

Here are three takeaways:

#1. Value-based reimbursement has reached a tipping point

In the survey, respondents had to rate their organization on a value-based reimbursement “continuum.”  Fee-for-service only was on one side of a continuum, and value-based reimbursement was on the other.

On average, payers reported that they are 58% along the continuum toward full value-based reimbursement. That’s a 10% increase over the progress payers reported in 2014.  

Hospitals are also moving along the continuum. On average, hospital respondents reported that they are at 50% along the value continuum, up 4% since 2014.

When it comes to specific types of value models, payer respondents who said they are currently exploring at least one type of value-based payment model predicted that in five years:

• Bundled payments will account for 17% of medical payment (up from the 11% they reported bundles account for currently);

• Capitation or global payments will account for 23% of medical payment (up from the 18% they reported capitation or global payments account for currently); and

• Pay-for-performance payments will account for 19% of medical payment (up from the 15% they reported these payments account for currently).

Andrei Gonzales, MD, McKesson’s director of value-based reimbursement solutions, says there are several reasons bundled payments are projected to grow faster than other value-based reimbursement models.

“The first is that bundles are a good way to incent value with specialty care,” he says “Other models like shared savings are good at incenting value with primary care.  A bundled payment for a well-defined episode of care like a hip replacement or a pregnancy and delivery is an effective way to incent providers to coordinate care across the continuum of the episode.”

In addition, government programs like the Comprehensive Care for Joint Replacement Model, and state programs in Arkansas, Tennessee, Ohio and New York are increasing adoption of bundled payments, says Gonzales.

“As providers and payers become more familiar with the processes needed to manage bundled payments and the benefits through the government programs, more commercial programs will follow,” he says.

Next:Trend #2: More payers are exploring narrow networks

Trend #2: More payers are exploring narrow network options

As payers move toward value-based reimbursement, they are looking for ways to ensure higher value care. One way is by being more selective in the provider networks they offer.

More than 60% of payer respondents to the survey said they have changed network strategy since 2014, with 53% using tiered networks and 42% using narrow networks.

In addition, more than 80% said they’re more selective about the hospitals in their networks.

What’s driving this push? Seventy five percent of payer respondents said care quality is their top driving factor.

“I think network design and selection will continue to evolve with a strong focus on quality as shown in the study, balanced with access and issues like patient preference,” says Gonzales, noting that as value-based models grow, consumers will gain more insight into provider performance. “This may help ease some of the frustration over narrow networks as patients see the performance of providers in their communities and understand why some providers were selected for a network over others.”

Trend #3: Accountable care organizations (ACOs) are here to stay

While payer respondents said they anticipate offering more bundled payments in the next few years, hospital respondents indicated higher participation in ACOs.

Sixty three percent of hospital respondents said they are part of an ACO. That’s 18% more than in 2014.

Of those who said they were part of an ACO, 72% said they were part of a Medicare ACO and 52% said they were part of a commercial ACO.

In addition, nearly half of the hospital respondents that said they aren’t part of an ACO said they anticipate to be within five years.

“ACOs and shared savings/risk payment models have shown promise in controlling costs and improving quality of care, and appear to be growing from the study results and statements from the commercial payers,” says Gonzales.