5 Market Trends Impacting Value-Based Reimbursement: “It’s Not Just About Volume”

Thursday, July 31st, 2014
This post was written by Cheryl Miller

Accompanying the move to value-based care and reimbursement is the need to align economic and practice incentives to create accountability, says Cynthia Kilroy, senior vice president of provider strategy and business development, Optum. It is not just about volume, but about managing populations, and investing in capabilities and tools to manage populations.

We are seeing five trends in the industry, with implications for each of them.

First, there is a consolidation of the provider community that physicians are organizing, and then hospital systems or large integrated delivery networks (IDNs) are purchasing physicians. We are seeing both an affiliated and an employed model in the market right now.

Another trend is system affordability. Premiums have been increasing significantly — more than 30 percent over the last five years. The challenge that CMS and some payors are focusing on is how to make healthcare more affordable to the community at large.

A third trending area is value-based care, and aligning the economic and the practice incentives to create accountability. It is not just about volume, but about managing populations. This leads into the fourth trend, which is that provider organizations are investing in capabilities and tools to manage populations. Then the incentive models are moving more around that population care, which is more challenging to measure.

Finally, there is a significant amount of interest in finding performance metrics. There is HCAHPS®. Every other payor is asking for different performance metrics from organizations; how do we focus that into the right incentive, especially from an incentive program for physicians? Each organization will be trying to achieve something different; each market is very different. I may see one provider organization focus in particular areas and disease states around quality. In other markets there might be something completely different. It is based on what is going on in that particular market and practice.

Excerpted from 6 Value-Based Physician Reimbursement Models: Action Plans for Alignment, Analytics and Profitability.

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