Three Recent Studies and Three Different Perceptions of Value Based Payments

by Clive Riddle, November 3, 2017 Three different recently released studies addressing value based payments fuel three different perceptions: (1) value based payments have solid momentum; (2) that hospitals view value based care is growing more slowly than anticipated; and (3) physicians prefer FFS systems to value based care. The Health Care Payment Learning & Action Network has just released a report with survey results indicating “29% of total U.S. health care payments were tied to alternative payment models (APMs) in 2016 compared to 23% in 2015, an increase of six percentage points.” The Network states that “the survey collected data from over 80 participants, accounting for nearly 245.4 million people, or 84%, of the covered U.S. population.”   While 29% of payments were value based and totaling “approximately $354.5 billion dollars nationally” in 2016, the Network determined that 43% of payments were “traditional FFS or other legacy payments not linked to quality” and 28% was “pay-for-performance or care coordination fees.” Deloitte recently released results from their 2017 Survey of US Health System CEOs which includes are chapter on Population health and value-based care that provides these insights: ·         “Survey participants say the transition to value-based care is happening, but at a slower rate than initially anticipated. Still, many of the CEOs report that they are developing and expanding innovative delivery and payment models, and are focusing on MACRA and physician activation. ·         “Many CEOs also are looking into strategies to generate physician buy-in and encourage behavioral change, which will help them be better prepared for the transition to population health and value-based care.” ·         “Many of the surveyed CEOs express concern about operating under two different payment systems—FFS and value-based care—and having misaligned incentives. Moreover, moving towards population health and bearing financial risk likely will require a large patient population.” ·         “Many CEOs who previously had acquired and invested in physician practices report being more engaged and prepared for MACRA implementation than other survey respondents. “ ·         “In our survey, some respondents indicate they are using tools including clinical integration, employment contracts with incentives, ACOs and risk-sharing agreements, among others to better activate physicians in care delivery transformation.” Meanwhile, Bain & Company recently released their Front Line of Healthcare Report 2017, in which they surveyed 980 physicians and concluded that “more than 60% of the physicians we surveyed believe it will become more difficult to deliver high-quality care in the next two years as they struggle to cope with a complex regulatory environment, increasing administrative burdens and a more difficult reimbursement landscape. After years of experimentation, physicians now want evidence that new models for care management, reimbursement, policy and patient engagement will actually improve clinical outcomes. Without it, they see little reason to alter the status quo and move toward widespread adoption.” Specific to physician receptivity toward value based care, Bain found that physicians very much prefer FFS if they had their druthers: “More than 70% of physicians prefer to use a fee-for-service model, citing concerns about the complexity and quality of care associated with value-based payment models. Fifty-three percent of physicians say that capitation reduces the quality of care, and most see little advantage from pay-for-performance models either. Further, many believe their organizations are not sufficiently prepared for the shift to value-based care.”