- The threat of financial loss is the biggest barrier for organizations looking to move to value-based models, according to a new report from consultancy Numerof & Associates, though the pandemic has highlighted the shortfalls of paying for care solely based on volume.
- The survey of more than 500 U.S. healthcare executives found a majority of 83% still say population health is "very" or "critically" important moving forward, and almost all (99%) project their company will have some revenue in alternate payment models in two years.
- However, organizations' bullishness on moving away from fee-for-service hasn't panned out in the past. The survey found the median percentage of revenue from contracts that linked payment to managing cost and quality was just 10%. Two years ago, respondents predicted the figure would be three times higher by now.
The survey found the healthcare industry generally supports alternate payment models, but is still falling short of actually tying reimbursement to value.
About one in five respondents said the threat of financial loss was the main barrier to moving to a risk-based model in the survey conducted between June and September last year, before the pandemic. Other oft-cited barriers are issues with systems like IT, tracking and management (15%), uncertainty about timing the transition (13%) and problems with modeling the cost of care (10%).
However, the novel coronavirus and its economic turmoil have put in stark relief the myriad issues with paying for care solely based on volume. Many small, cash-strapped hospitals and doctor's offices have been staring down the barrel of insolvency since March as patients eschewed non-emergent care, sending visits and revenue flatlining.
By comparison, providers in alternate payment models, like direct primary care, have been more insulated from the pandemic's deleterious effects.
"One of the greatest ironies in all this is that because of Covid-19, people are realizing that there’s just as much — if not more — risk in staying in an antiquated, fee-for-service model than there is in embracing an alternative," Rita Numerof, president of Numerof & Associates, said in a statement. "We expect to see the sentiments surrounding risk shift significantly next year, especially as awareness of providers’ success with capitated payments during the pandemic becomes even more mainstream."
However, value-based models aren't a panacea. Clinicians in many risk-based arrangements are worried they'll be dinged financially when their 2020 performance is evaluated due to higher-than-expected costs and worse-than-expected patient outcomes amid the pandemic.
Some proponents of value-based programs, like accountable care organizations, are worried COVID-19 could lead to a mass exodus of providers from the models. And it's unlikely providers will be willing to put more upfront capital at risk in the near-term given the current situation, though some payers like Blue Cross Blue Shield NC and CMS are working to nudge providers toward value-based models over the next few years.