Value-based care payments increasing but risk still rare

By | December 8, 2019

Dive Brief:

  • More than half of all commercial plan payments to hospitals in 2017 were earmarked toward some form of value-oriented care or alternative payments intended to reduce waste, according to the latest scorecard from Catalyst for Payment Reform (CPR) — up from just 10.2% in 2012.
  • However, a large chunk of the value-oriented payment (90%) was built off of the fee-for-service infrastructure. meaning the overwhelming majority of these payments had no downside risk. The chairman of CPR, a nonprofit that works with employers and other large purchasers, called the results “disappointing.”
  • Bundled payment adoption remained flat between 2012 and 2017, despite various studies showing their promise in holding down costs. They made up only 2% of all value-based payments in 2017.

Dive Insight:

Value-based care has been pushed hard over the past decade, and the new report shows that uptake has been considerable in just the past few years. However, while carrots are abundant, sticks are few and far between.

In total, 53% of all payments made by health plans to hospitals were tied to a value-oriented or alternative payment method. That reduces down to 43% of outpatient primary care provider payments and 19% of all outpatient specialist payments. But scant few of those dollars had strings attached to them, let alone any financial penalties for profligate spending.

According to CPR, 44.4% of value-oriented of payments were fee-for-service based, which means they were essentially canceled out depending on how the providers billed for care. And only 23% of those payments had a downside risk for providers, meaning nearly 80% had no financial incentive for providers to be more disciplined in their approach.

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This was borne out in some of the clinical data also published by CPR. Nearly 40% of commercial health plan enrollees had poorly controlled blood sugar; 58% of health plan enrollees with hypertension had poorly controlled blood pressure; and 23 out of every 1,000 adult hospital patients acquired serious pressure ulcers during their stay. Meanwhile, 9.5% of all enrollees in commercial health plans went without needed healthcare due to concerns about costs.

“The results of these analyses are disappointing and a wake-up call that we are moving too slowly and essentially missing the mark,” Robert Galvin, CEO of the firm Equity Healthcare and CPR board chairman, said in a statement. “Not all payment reforms are equally effective and it’s time to put our energy toward payment methods that don’t rely on fee-for-service.”

Correction: A previous version of this story listed an incorrect affiliation for Catalyst for Payment Reform.

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