- Only one-third as many large employers are pursuing alternative payment models compared with before the COVID-19 pandemic.
- Three-quarters of employers are increasing their virtual care offerings.
- Few survey respondents are planning payment increases for virtual primary care.
Providers should expect fewer value-based payment (VBP) models in employer-sponsored insurance and more virtual care this year as the COVID-19 pandemic swamps large companies and providers, according to a new survey.
Large employers consumed by organizational challenges and health benefit demands created by the pandemic and by government policy responses have pulled back on value-based payment initiatives, according to the annual survey by the Business Group on Health (BGH).
The pandemic “may have pulled them away from being able to put in some new programs related to delivery reform,” such as accountable care organizations (ACOs), centers of excellence (COEs), value-driven narrow networks and advanced primary care, said Brenna Shebel, vice president of BGH.
Among the survey’s findings, the share of large employers that are aiming to “drive delivery system change approach by pursuing the implementation of alternative payment and delivery models” declined from 16% in 2019 to 5% in 2020.
Models affected include COEs, which use providers that have been vetted for quality to perform costly musculoskeletal procedures or cancer treatments. Those models have been disrupted by state travel bans aimed at limiting the spread of COVID-19, Shebel said.
Similarly, employers were unable to work out the administrative details of ACOs and other models because some providers were pulled away by the numerous organizational demands of the pandemic, Shebel said.
Ellen Kelsay, president and CEO for BGH, said employers are talking to providers with which they have shared-risk arrangements through VBP models about the challenges the pandemic has posed for meeting their benchmarks. She was optimistic employers would consider 2020 flexibilities similar to those Medicare has offered providers in its VBP models.
“There are some very real challenges of the current state and environment for providers and the measures that would traditionally be looked at in assessing the risk,” Kelsay said. “And so, I think [employers] are taking a long-term view of the partnership and viewing this year as a bit of an anomaly.”
Instead of expanding VBP this year, the employers have vastly increased their focus on virtual care.
“Among those that are not waiting for delivery system change to take place, they’re really working through virtual- and digital-care point solutions in order to make that change,” Shebel said.
Large employer responses this year to the pandemic include:
- 76% made changes to increase access to virtual solutions
- 71% accelerated telehealth and virtual health offerings
- 43% added new virtual mental-health benefits
Among employers, 24% “took matters into their own hands, circumventing the system to implement virtual solutions — a significant jump from previous years, when only 6% in 2018 and 5% in 2019 went this route,” the survey found.
Similarly, 80% of large employers said they believe virtual care will have a significant effect on how healthcare is delivered in the future, a marked increase from 2018 (52%).
'Virtual primary care' becomes more prominent
Another new trend identified by the survey was the shift to virtual primary care, which is different from primary care that also offers virtual options.
“This is establishing a primary care relationship with a provider in a virtual way, and visits are on a virtual-first format,” Shebel said.
Of surveyed employers, 21% will offer virtual primary care in 2021, and an additional 35% plan to offer it within three years.
However, only 9% of employers plan to increase primary care provider payments for virtual visits.
VBP models likely will return
Employers have not abandoned VBP models.
“In the end, we expect once the pandemic does wane that a lot of these efforts will pick back up,” Shebel said.
For instance, survey findings about employers’ 2021 plans include:
- 24% aim to expand COEs to include additional conditions
- 12% aim to implement high-performance networks
- 8% aim to implement advanced primary care solutions in select markets
- 4% aim to implement ACOs in select markets
ACOs and high-performance networks (HPNs), which are narrow networks based on provider quality, remain common within ESI benefit designs, and employers plan to increasingly steer employees to those providers, Shebel said.
The share of employers that plan to steer workers in 2021 to physician-based ACOs and HPNs through plan design or referrals is 16% — and is expected to increase by another 32% within three years.
The survey of 122 large employers covering 9.2 million beneficiaries was conducted in May.