[et_pb_section fb_built=”1″ _builder_version=”4.21.0″ custom_padding=”0px|||||” global_colors_info=”{}”][et_pb_row column_structure=”3_4,1_4″ _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”0px|||||” global_colors_info=”{}”][et_pb_column type=”3_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/sage-growth.com\/wp-content\/uploads\/2021\/04\/wheres-the-value2.jpg” title_text=”wheres-the-value2″ align=”center” _builder_version=”4.21.0″ _module_preset=”default” custom_padding=”0px|||||” global_colors_info=”{}”][\/et_pb_image][et_pb_post_title categories=”off” comments=”off” featured_image=”off” _builder_version=”4.21.0″ _module_preset=”default” title_font=”||||||||” title_font_size=”32px” title_line_height=”1.1em” meta_font_size=”15px” meta_line_height=”2.2em” custom_margin=”-9px||14px|||” global_colors_info=”{}”][\/et_pb_post_title][et_pb_text _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}” custom_margin=”-2px|||||”]<\/p>\n
For years, healthcare industry pundits have been predicting that we\u2019re on the verge of a tipping point in value-based payment (VBP) and\/or care. In a\u00a02016 survey of 115 payers<\/a>\u00a0by ORC International and commissioned by McKesson, respondents predicted that VBP\u2014such as pay-for-performance, global payment or capitation, and bundled payments\u2014would make up at least 60 percent of payments by 2021.\u00a0<\/p>\n That may have been overly optimistic. While one ostensibly might argue that the industry reached the tipping point in 2017,\u00a0when 53 percent of commercial payments to doctors and hospitals involved value-based approaches, only 6 percent of total 2017 dollars entailed downside provider risk.<\/a>\u00a0Much of what passes for value-based payments is still built on a foundation of fee-for-service (FFS).<\/p>\n While CMS originated most of today\u2019s alternative payment models, private payers appear to be taking on a greater percentage of the value-based pie. In 2020,\u00a0over half of private plans offered bundled payments and ACO arrangements, vs. about a quarter of public plans<\/a>, according to a survey conducted by Insights by Xtelligent Healthcare Media. Yet 83 percent of those survey respondents noted that fee-for-service remained the dominant payment method.\u00a0<\/p>\n In 2021, most public payer VBP models still don\u2019t entail downside provider risk. According to CMS, for example,\u00a059 percent of Medicare Shared Savings Program<\/a>\u00a0participants are still upside-only\u00a0(though this has improved from 2019 when 71 percent were upside-only).\u00a0<\/p>\n The success of VBP programs is also checkered. On one hand, the\u00a0oncology care program has largely been a debacle<\/a>, while bundled payment programs have made joint replacement care more predictable with perhaps some gain in quality.\u00a0A systematic review<\/a>\u00a0of the impact on costs, utilization, and quality from studies of three CMS bundled payment programs found these programs maintain or improve quality; however, only lower extremity joint replacement procedures saw lower costs.<\/p>\n A recent article in the\u00a0New England Journal of Medicine<\/em>\u00a0examined the\u00a0impact of a decade of operating the Center for Medicare and Medicaid Innovation<\/a>\u00a0(CMMI), which was funded by the Affordable Care Act at a cost of over $20 billion to spur new models. Author Brad Smith, CMMI Director, said that \u201cvalue-based care will achieve its promise only if the federal government and stakeholders take more aggressive action to prioritize models that can truly achieve savings and improve quality.\u201d The bottom line is that CMS doesn\u2019t have a lot to show yet for the considerable time and money spent on such programs.\u00a0<\/p>\n One of our long-term partners,\u00a0DataGen<\/a>, a New York-based healthcare analytics company, conducted a study to take stock of\u00a0industry adoption of value-based programs<\/a>, benefits, and anticipated changes.<\/p>\n<\/div>\n<\/div>\n [\/et_pb_text][et_pb_image src=”https:\/\/sage-growth.com\/wp-content\/uploads\/2021\/04\/datagen-graph-clear.jpg” title_text=”datagen-graph-clear” _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][et_pb_text _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n Here\u2019s what they found:<\/strong><\/p>\n Why has the predicted tipping point not yet arrived? There appear to be multiple factors working against the shift, including:\u00a0<\/p>\n Reforming the FFS, sick care\u2013based U.S.\u00a0healthcare system has, unsurprisingly, proved to be a slow and painful process akin to turning an oil tanker. The number of stakeholders is huge, and each has vested interests in preserving their slice of the healthcare pie. Changes have been largely incremental rather than revolutionary. And it\u2019s not just on the provider side. Many of the hospital executives we\u2019ve interviewed in the past few years have complained that they can\u2019t move faster because the key payers in their market are reluctant to support such efforts.<\/p>\n We know from our conversations with providers and plans that, despite significant efforts to embrace VBP, healthcare executives face other, competing priorities due to various industry changes.\u00a0An early 2020 poll<\/a>\u00a0of 25 hospital CEOs and six payer CEOs, for example, found that\u00a0while executives viewed VBP as a significant driver of industry changes, they ranked it below other change drivers such as ongoing shifts in care settings and more proactive consumers.<\/p>\n The healthcare industry is notorious for moving slowly, and VBP is no exception. The ACA promised healthcare reform and delivered insurance reform. Changes in insurance reform ensured more people are covered in a system that is still largely broken. True healthcare reform, where providers are focused on delivering consistent, integrated care with predictable results, can only happen when payment for healthcare services incents those outcomes in a bigger way.<\/p>\n<\/div>\n<\/div>\n We\u2019re still climbing the rather steep maturity curve for collecting and using our mountains of data in timely and meaningful ways. While we\u2019ve made progress in assessing member and patient risk, we continue to face massive challenges in finding and proactively treating those with risk factors such as diabetes, cardiovascular conditions, or behavioral health issues.\u00a0\u00a0As artifical intelligence (AI) grows in acceptance and adoption, this should improve.\u00a0\u00a0<\/p>\n There are too many models, too much complexity, and too many metrics. One problem is that \u2018value based\u2019 has a broad range of meanings. Is it truly value-based when providers are paid on a FFS basis but eligible for bonuses and at risk for penalties if they don\u2019t meet certain quality metrics?\u00a0\u00a0Physicians, hospitals, and health systems have a different set of payment and quality rules for different populations of patients. Keeping track of that and adjusting how you treat a patient based on those rules is neither feasible nor okay. Simpler payment rules, allowing for consistent and repeatable delivery of care for all patients, will help push true healthcare delivery reform.<\/p>\n Many providers are struggling to succeed and adapt to VBP models due to poor data transparency and interoperability barriers. In a 2018 survey,\u00a074 percent of financial executives<\/a>\u00a0in large hospitals said they need to become better at both external and internal data sharing within the next three years to succeed in value-based care. The survey also found that\u00a0provider executives believe payers can improve value-based adoption by sharing more of their data with providers. While gains have been made in both these areas since 2018, there\u2019s still a lot of room for improvement. \u201cData rich and insight poor\u201d is a phrase that has been around for way too long. Given the technology available today, access to and use of data to further healthcare reform and better delivery of care ought to have been solved well before today.<\/p>\n<\/div>\n<\/div>\n SGP recently conducted a survey of 100 healthcare executives on behalf of our\u00a0AI and automation partner, Olive<\/a>. Executive awareness and adoption of AI and automation has grown measurably in just one year, although most organizations are early in their adoption process. Only 24% have moved beyond the pilot stage, and only 7% say they are fully operational.<\/p>\n But the fact that 90% say they have a strategy, this area looks poised to take off.<\/p>\n<\/div>\n<\/div>\n [\/et_pb_text][et_pb_image src=”https:\/\/sage-growth.com\/wp-content\/uploads\/2021\/04\/olive-chart.png” title_text=”olive-chart” _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][et_pb_text _builder_version=”4.21.0″ _module_preset=”default” global_colors_info=”{}” custom_margin=”||-32px|||”]<\/p>\n While progress toward VBP has been slower than many expected, if 2020 taught us one thing, it\u2019s that the healthcare industry can move much more quickly than we ever expected. Just consider the rapid expansion of payment for telemedicine services by payers, quick implementation of virtual care models by providers, and the lightning speed at which highly effective COVID-19 vaccines were created.\u00a0<\/p>\n Whether VBP will experience a similar trajectory or continue to slow its pace in the years ahead remains to be seen. Some industry experts believe the pandemic will accelerate capitated payment models because providers already in these arrangements weren\u2019t adversely affected by the plummeting patient volumes during COVID-19. Others, however, believe the pandemic will decelerate VBP growth.\u00a0A recent survey<\/a>\u00a0of over 200 ACOs by the National Association of ACOs revealed that 77 percent are very concerned about the pandemic\u2019s impact on their 2020 performance and that 44 percent are likely\/very likely to leave their risk-based model due to these concerns.<\/p>\n Regardless of where VBP is heading, we are encouraged by ongoing efforts among payers and providers to improve the quality of care and reduce costs, as well as by health IT companies that continue to create innovative new tools that can support those efforts. Even if we never fully reach the VBP tipping point, the industry has learned valuable lessons over the past few years that will continue to move us closer to achieving that triple aim of improved quality, lower costs, and a better patient experience.\u00a0<\/p>\nWHERE THE INDUSTRY CURRENTLY STANDS ON VBP\u00a0<\/strong><\/h3>\n
DATAGEN AND THE FUTURE OF VALUE-BASED CARE<\/strong><\/h4>\n
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WHAT\u2019S SLOWING VBP PROGRESS?<\/strong><\/h3>\n
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ENTRENCHED PAYMENT MODELS<\/strong><\/h4>\n
COMPETING PRIORITIES<\/strong><\/h4>\n
CARE DELIVERY CHANGES ARE SLOW<\/strong><\/h4>\n
IMMATURE ANALYTICS, RISK ASSESSMENT, AND DECISION<\/strong>\u00a0TOOLS<\/strong><\/h4>\n
COMPLEXITY<\/strong><\/h4>\n
LACK OF TRANSPARENCY\/INTEROPERABILITY<\/strong><\/h4>\n
OLIVE FINDS HEALTHCARE AI AND AUTOMATION POISED TO TAKE OFF<\/strong><\/h4>\n
WHERE WE GO FROM HERE WITH VBP\u00a0<\/strong><\/h3>\n
PREALIZE PREDICTS IMPACT OF DEFERRED CARE<\/strong><\/h4>\n