5 Market Trends Affecting Value-Based Reimbursement

Tuesday, March 25th, 2014
This post was written by Patricia Donovan

physician compensation

A new economy is reshaping healthcare delivery, measurement and funding.

Changes in the way healthcare is delivered, evaluated and funded are having a serious impact as the industry gradually shifts from productivity- to population-focused compensation, according to Cynthia Kilroy, senior vice president of provider strategy and business development at Optum.

We are seeing five trends in the healthcare industry that are affecting value-based reimbursement, with implications for each.

First, there is a consolidation of the provider community: physicians are organizing, and hospital systems or large integrated delivery networks (IDNs) are actually purchasing physicians. We’re seeing both affiliated and employed models going on in the market right now.

Another influential trend is system affordability. We’ve talked about this a lot, but premiums have been increasing significantly— more than 30 percent over the last five years. A lot of the challenges and what CMS and some payors are trying to focus on is, how can we make healthcare more affordable to the community at large?

A third area of trends is the value-based care models, or the alignment of economic and practice incentives to create accountability. This does not just relate to volume, but also to how to manage populations. Which leads into the next trend, which is the investment of provider organizations in capabilities and tools to manage populations. The result is that the incentive models are moving more toward that population-based care, which is much more challenging to measure.

And then finally, we have a lot of interest in performance metrics—HCAHPS,® for example. With just about every other payor asking for different performance metrics from organizations, how do we really focus, especially from an incentive program for physicians, into the right incentive? More than likely, each organization is going to be different about what they’re trying to achieve; each market is very different.

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

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