Value Based Payment

March Toward Value-Based Care Slipping: Survey

July 18, 2018 1:51 pm

Other recent value-based care reports give conflicting information on the adoption of VBC models and ability of VBC to reduce medical costs and improve clinical outcomes.

July 18—A new survey of physicians and health plan execs says the march toward value-based care (VBC) is slipping, throwing shade on other surveys that say the transition to outcomes-based payment is on track.

The latest survey comes from Quest Diagnostics, the Secaucus, N.J.-based clinical laboratory company. Quest’s 14-page report, released July 17, surveyed 300 primary-care physicians (PCPs) employed in private hospital-affiliated medical practices and 151 health plan executives.

Fee-for-Service Difficult to Eradicate

More than two-thirds of the respondents—67 percent—said the United States operates a fee-for-service (FFS)-based healthcare system. That’s up from 63 percent from last year, when Quest conducted a similar survey of 452 PCPs and health plan executives.

This year, only 27 percent of the respondents said the nation has a VBC-based healthcare system, down from 29 percent in 2017.

“The study points to physicians’ lack of tools and insufficient information about their patients as possible reasons” for their less optimistic outlook for VBC, Quest said in a release announcing the release of the survey results.

The percentage of respondents who said they believe physicians have the tools needed to succeed with VBC dropped to 42 percent this year from 46 percent last year. The percentage of respondents who said they think doctors lack enough information about their patients to make VBC work jumped to 72 percent this year from 60 percent last year.

Sherry Glied, dean of the Wagner School of Public Service at New York University, said she agreed with the conclusion of the Quest survey that the industry-wide transition to VBC has bogged down.

“Initially there was a lot of hope and hype about value-based care,” said Glied, also a former assistant secretary for planning and evaluation at the U.S. Department of Health and Human Services. “Now people are realizing it’s a lot of work. Things have definitely plateaued and may even be slowing down.”

It will take better policies, better management, better incentives, better tools, and better technologies to get things moving again, Glied said in an interview, and that may take some time.

VBC Needs Stronger Incentives

Quest’s survey results echoed the findings of a report released June 25 by HFMA, Leavitt Partners, and McManis Consulting. The 40-page report, “What Is Driving Total Cost of Care: An Analysis of Factors Influencing Total Cost of Care in U.S. Healthcare Markets,” detailed an analysis of the total cost of care for Medicare patients and commercially insured patients in more than 900 U.S. markets. The analysis found no significant correlation between VBC penetration in the markets and lower costs or higher quality clinical outcomes.

The researchers then looked at nine individual markets to find out why, and they concluded that VBC wasn’t living up to its promise for four possible reasons:

  • Timing of the study period was too early to realize the savings from VBC
  • Lacking strong enough incentives in most VBC models to manage the cost of care
  • Failing of healthcare organizations to push incentives down to the clinician level
  • Offsetting cost of setting up a VBC infrastructure to any potential savings from VBC itself

The report quoted one unnamed healthcare executive in one of the nine markets as saying that most VBC models right now “are just fee-for-service in disguise.”

Others: VBC Is Cutting Costs

Meanwhile, other recent reports from three different organizations painted a different picture of the state of VBC.

The first was a report from Change Healthcare, the Nashville-based healthcare technology and business advisory company and released June 18. The 44-page report, “Finding the Value in Value-Based Care,” revealed the results of a survey of 120 health plan executives.

The Change Healthcare report said the decline in FFS payment models is accelerating, not stalling. A little more than one-third—37.2 percent—of health plan business this year is FFS, said the respondents. That’s down from more than half—51.7 percent—in 2016, according to a similar survey of health plan execs conducted by Change Healthcare two years ago. Further:

  • Thirty-seven percent of the respondents said VBC reduced their health plan’s medical costs by 5 percent to 7.49 percent this year. The average cost savings for all respondents was 5.6 percent.
  • Seventy-seven percent of respondents said VBC “greatly” or “slightly” improved the quality of care provided to their health plan’s enrollees this year.

End of FFS Near?

The second reportwas released from HealthLeaders Media in June. The 20-page report, “Staying the Course of Value,” surveyed 90 healthcare executive members of the HealthLeaders Media Council and found the shift to VBC is picking up speed. The respondents said 23 percent of their patients are in a VBC program, and they expect that to double to 46 percent within three years. They said their net patient revenue from FFS payments will drop to 49 percent within three years from 74 percent today. Further:

  • Seventy percent said their organizations have developed the care coordination competencies to succeed with the VBC model
  • Sixty-three percent said their organizations have developed VBC performance metrics and have aligned their VBC incentives with employed physicians and other affiliated providers

The third optimistic finding was a poll of 221 healthcare executives by KPMG during a June webinar.

Only 10 percent of the KPMG respondents said VBC represented a majority of their payment contracts. But, 46 percent said the VBC contracts they have are improving the profitability at their healthcare organizations. That’s up from 23 percent who said so when they were asked the same question two years ago in a similar poll conducted by KPMG.

When it comes to the market penetration of VBC models and their power to improve quality and lower medical costs, the answer may depend on the survey respondents.

David Burda is a veteran healthcare business reporter. Follow him on Twitter: @DavidRBurda 


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