Evaluating Cost-of-Care Progress
In an analysis of factors that may be influencing total cost of care in U.S. healthcare markets, researchers from HFMA, Leavitt Partners, and McManis Consulting report the following:
- The penetration of population-based value-based payment (VBP) models is not yet having an impact on curbing growth in total cost of care. The cost efficacy of these models has not yet been proven, however, even in markets where these models are more prevalent, most models do not yet incorporate sufficient financial incentives to impact care delivery significantly.
- Although more time and evidence are needed to prove the efficacy of population-based VBP models, there are other models that may be more appropriate for different populations. Alternative VBP models of interest to stakeholders interviewed for this study include episode-based payments, reference-based pricing, on-site health centers for employers and their employees, consumer-driven models tied to more effective transparency tools, and models that target the needs of specific patient populations.
- The question of “what type” of competition may be more important than “how much” competition. Lower-cost markets appear to benefit from competition among healthcare systems with well-organized provider networks and geographic coverage across their markets. Health plan competition also appears to be a significant factor, especially in encouraging payment model and plan design innovation.
- Lower-cost markets appear to benefit from organized mechanisms, including state-sponsored or endorsed reporting agencies and employer coalitions, for sharing provider quality and costs.
To access the report or executive summary, visit hfma.org/tcoc.