Reimbursement News

How Value-Based Reimbursement Created a Payer-Provider Gap

By Elizabeth Snell

- As the transition from volume-based reimbursement to value-based reimbursement continues, it is essential for healthcare payers and providers to work together. However, if a recent survey is any indication, it could be difficult to get those two sides of healthcare to cooperate with one another for a smooth process.

The 2014 FTI consulting Payer-Provider Survey found that 41 percent of primary care physicians not currently in a value-based relationship say their biggest obstacle before entering one is their distrust of payers. That could be a big issue for payers to overcome, as provider buy-in and engagement are typically cited as critical to the success of value-based arrangements, the report said.

Additionally, just 16 percent of surveyed physicians were willing to accept the financial risk, which is an important aspect of many value-based relationships sought by insurers, the report’s author’s explained.

Mark Fish, Managing Director of the FTI Consulting Health Solutions team, discussed the survey results with RevCycleIntellegence.com, and said that while a transformation is happening in healthcare, there is clearly still a ways to go.

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  • “What’s happening in reality is that the transition is probably [happening] at a slower pace or more cautious pace than what we had really kind of expected,” Fish said. “Additionally, there are some barriers that people really need to overcome to make that happen.”

    According to Fish, the three main barriers that healthcare payers and providers need to overcome are: providers being willing to take on risk, information technology, and clinical integration and scale.

    For example, only 16 percent of providers said that they were willing to accept financial risk. However, 92 percent of providers said that contracts for value-based arrangements incentivized by the Affordable Care Act (ACA) are either “somewhat” or “very important” to them.

    “Right now a lot of the models are shared savings, where providers have the ability to share in savings if they’re generated,” Fish explained. “But if there’s any sort of negative aspect or if there are years that don’t meet up to expectations, then the providers aren’t at risk of that. I think that for this really to move forward, what we’re hearing from the payers is they’d like to see the providers willingness to take on more risk.”

    The second barrier discussed in the survey is IT integration. While there has been a lot of investment in those areas, particularly electronic health records and population health management tools (PHM), Fish said that different tools and products can’t always “talk to one another.”

    Essentially, physicians may have made investments, but the products are on different platforms or are different versions. Then, they cannot always communicate with other hospitals or practices.

    The survey found that only 50 percent of healthcare providers said their organizations have implemented new technology or software to support PHM and value-based reimbursement, while 32 percent have not. However, 80 percent of payers say they would be likely to contract with a clinically-integrated hospital and provider system.

    Clinical integration and scale was the last major barrier in the payer-provider relationship, according to the survey. According to Fish, for clinical integration to be successful, there has to be outreach to independent physicians. But it must be done in a way that is nonthreatening.

    “The whole idea of clinical integration is doing [outreach] in a way information is equally shared and can be acted upon so that you’re really capturing all the activities for a given population in a given community,” Fish said. “There needs to be more effort around that outreach, which hasn’t always happened.”

    While the process might not happen overnight, Fish explained that the payer-provider gap can shrink with the right approach. The key is to not “jump into it full steam,” he said. Instead, expectations need to be set up front so both parties understand what is required. From there, see how it works over the next few years.