- Healthcare providers are planning to assume higher levels of risks through commercial payer contracting models, Medicare contracting models and Medicare Advantage plans, according to a new survey the Healthcare Financial Management Association conducted for Navigant.
- Provider-sponsored health plans (PSHPs) are also part of providers' risk assumption plans, with 44% of respondents indicating their companies had already launched a PSHP or plan to launch one.
- The swelling number of people entering the Medicare program and decreasing demand for inpatient services are affecting providers' margins and leading them to look at new revenue drivers, which can include models in which they accept more risk.
According to the survey, 64% of the hospital and health system senior finance executives said their organizations are prepared to increase their levels of risk over the next one to three years — 64% through commercial payer contracting models, 57% through Medicare value-based models and 51% in Medicare Advantage plans.
"With most health systems anticipating continued downward pressure on margins, accepting risk can represent a lever for revenue growth, as long as providers clarify internal accountabilities and commit enough of their resources to risk models," Richard Bajner, Navigant managing director and healthcare value transformation practice leader, said in a statement.
"The Affordable Care Act left many providers assuming that risk-based models would be the new normal, but the transition has not been as successful or widespread as anticipated," Bajner added. The analysis found the market is still primarily driven by fee-for-service payments.
But while providers plan to increase risk assumptions, payers must also jump on board, Kai Tsai, Navigant managing director, said.
"Sharing risk must be a collaborative pursuit between payers and providers," Tsai said. "Both entities need to partner more closely to lessen the gap between the supply of and the demand for risk arrangements in markets nationwide."
Having the right technology underlying payer-provider risk arrangements is critical, the survey showed. More than 60% of respondents who said their organizations were planning to assume more risk and improve payer collaboration said they planned to invest more in technological capabilities.
But not all executives surveyed said their organizations were ready to take on more risk. Among those who indicated their organizations would not not increase risk levels, 56% cited a lack of local market demand as the reason. About 42% of executives said operational processes, including contract execution and care coordination and management, was the top challenge in maintaining risk-based capabilities.
The latest findings from Navigant jibe with other recent surveys. Trade association AMGA found nearly three quarters of physician groups said they would be ready to accept downside risk payments in the next two years, an increase from 42% in 2015.
And CMS has been pushing models that have more risk, including through changes to the Medicare Shared Savings Program and one of the tracks in the primary care program, the agency announced in April.