Despite the momentum associated with value-based contracting, a new survey found that payers continue to struggle with the transition to a payment model that rewards value — facing external and internal barriers.
HealthEdge's latest Voice of the Market Survey was based on interviews with 151 health insurance executives and found little agreement about the best value-based model. Nearly one-third of respondents said patient-centered medical homes are the most successful, followed by accountable care organizations (29%), bundled payments (23%) and episodes of care models (17%).
Payers said they don't expect that value-based programs will grow much over the next two years. More than half said provider and member engagement are the biggest challenges to implementing value-based contracts while 40% cited technology-related challenges as the biggest barrier.
Payers, including CMS, view value-based contracting as way of the future. They see such models as a way to improve quality, patient health and patient satisfaction while cutting costs. Getting there has been a challenge, though.
Studies have shown the positives of ACOs, bundled payments, the Medicare Shared Savings Program and Comprehensive Care for Joint Replacement model. However, there are still concerns with the move to value-based payments.
A key sticking point is that payers want providers to take on more risk. In December, CMS announced a "new direction" for the MSSP called "Pathways to Success." The change includes pushing more ACOs to take on risk more quickly, which providers oppose.
CMS said moving more providers into a risk-based model will lead to more savings for the Medicare Trust Funds. However, a recent Avalere study found that experience is the key to an ACO's success — not taking on risk.
Meanwhile, payers in the new survey cited ongoing barriers hampering progress to value-based care, such as technology, infrastructure, administrative and member and provider engagement. They're also concerned about "upsetting the status quo on existing margins and must decide on the risk-reward of taking on the challenge."
Steve Krupa, CEO of HealthEdge, said the survey found that more collaboration and alignment between payers and providers is the first step in value-based reimbursement. Payers and providers need to build trust and create shared goals with providers.
"In order to be successful, insurers must leverage a modern technology infrastructure that is designed to support the complexities in configuration and administration of these risk-sharing arrangements across all stakeholders," Krupa said.
Private payers view value-based contracting positively, but, as the study shows, there are still hurdles. The healthcare industry isn't exactly swift when adapting to new models and value-based contracting is no exception. Nevertheless, CMS and payers remain committed to the change, despite implementation issues and pushback from providers.