At the risk of restating the obvious, transitioning from fee-for-service to value-based care is far from easy. Ten years in, value-based care adoption continues, yet trails aggressive goals set by the U.S. Department of Health and Human Services to link 30 percent of fee-for-service Medicare payments to alternative payment models by 2016 and 50 percent by 2018.
Steady Value-Based Care Adoption
The most recent Catalyst for Payment Reform National Scorecard on Commercial Payment Reform, released in December 2019, found “the percent of payments to doctors and hospitals flowing through value-oriented or ‘alternative payment methods’ in the commercial sector grew from 10.9 percent in 2012 to 53 percent in 2017.”
The Health Care Payment Learning & Action Network analysis of 2018 data from 62 health plans, seven fee-for-service Medicaid states and traditional Medicare determined “the healthcare industry is about a third of the way to payment reform.” Nearly 36 percent (35.8) of healthcare payments were tied to alternative payment models, up from 34 percent in 2017.
- 39.1 percent of 2018 healthcare payments were through fee-for-service with no link to quality or value
- 25.1 percent were fee-for-service with a link to quality and value
- 30.7 percent were alternative payment models built on fee-for-service, e.g. bundled payments
- 5.1 percent were population-based payments, e.g. global budgets or per-member-per month payments
Source: Health Care Payment Learning & Action Network. Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicaid, Medicare Advantage and Traditional Medicare Programs. October 24, 2019.
That’s why health plans, hospitals and provider organizations, instead of making the risky decision to go “all-in” on value-based care, are increasingly opting for a phased transition, one that involves:
- Focused solutions addressing immediate needs;
- Early wins and return on investment;
- Internal support and adoption; and
- Eventual appetite for expansion to enterprise solutions.
In the words of a hospital chief financial officer, “As quickly as possible, I need to demonstrate some value to key internal stakeholders. Then I can realistically consider an enterprise solution.”
For most organizations, a phased approach to value-based care makes sense, one that often begins with physician and clinician engagement. For example, a primary care practice in Louisiana started with the data needed to consistently conduct wellness visits. “That, in turn, started increasing revenue. Once the dollars from savings started coming in, that helped us go further with value-based care,” said Darrin D. Menard, MD, FAAFP, local medical director for Aledade’s Louisiana and Southeast ACO.
Geneia uses a phased approach to population health management that helps organizations and their people thrive while successfully transitioning to value-based care. Let us show you how with examples from our work with health plan, hospital and physician organization clients and prospects1.
Download our new white paper, How a Phased Approach to Value-Based Care Works: For health plans, hospitals, and their value-based partners. In the white paper, you’ll read about a 90-bed hospital that’s challenged to preserve revenue while preparing for value-based care. Its Phase 1 includes:
You’ll also learn about a health system, two health plans and a third-party administrator, each with value-based care challenges and a three- or four-phase solution.
1Examples are based on Geneia’s work with clients and prospects. Identifying details have been changed. In some examples, steps have been omitted and/or consolidated to simplify the presentation of this material.