Measuring healthcare performance is their business, and business is good

To understand how Medicare will pay them in the coming years, physicians have to digest new regulations that lay out the details of metrics they'll have to report on and data they'll have to analyze. Doctors' responses will affect their income starting two years from now.

Or they can pay someone else to sort it out.

A rush of companies are selling services they say will help providers succeed under Medicare's new physician payment framework and other programs in an ever-expanding stable of payment reform initiatives.

“Value is the new economy, and measurement is going to be the new currency,” said Craig McKasson, chief financial officer of Premier, a Charlotte, N.C.-based company that's aggressively growing its division dedicated to healthcare performance-improvement technology and services.

On Oct. 14, the CMS issued its final rule implementing the Medicare Access and CHIP Reauthorization Act, or MACRA, which made significant changes to the draft rule. The law was conceived to coax the entire industry toward value-based care, and it's accelerating the demand for third-party experts whose services encompass everything from simply capturing information to analyzing it for performance improvement.

Some of these companies are relatively new. They were born as the 2010 Affordable Care Act produced a spray of new models experimenting with ways to tie healthcare reimbursement to quality and efficiency. Others have been in the performance services segment for years but are enjoying a boom in business, thanks to the expansion of value-based payment schemes that depend heavily on the complex and often burdensome gathering, submission and analysis of data in order to assess quality and costs of care.

Premier's performance services segment saw revenue growth of 19% in the fourth quarter of fiscal 2016 compared with the previous year. The company said it expected sales to increase in the performance services segment in fiscal 2017.

Premier's services include clinical integration and other population health needs, plus analysis of payment penalties under Medicare's value-based purchasing program. The company aims to alleviate the administrative burden of reporting and maximize performance.

Readiness among healthcare providers for MACRA and other programs varies widely. Larger organizations with deeper pockets tend to have more advanced technology, so they're in a better position to capture, submit and analyze information, said Austin Weaver, senior director for consulting at the Advisory Board Co.

But even the in-house abilities of large health systems have gaps. “They might not have a robust tool like a qualified clinical data registry that can ingest and organize information,” Weaver said. Others are operating on a time lag, he said. And with legislation and rules frequently changed and updated—the final MACRA rule is proof of that—providers also rely on outside sources to track crucial developments.

“This is all we do. This is all we think about,” said Dave Terry, the founder of Archway, a company that works with providers to implement and manage bundled-payment initiatives. It conducts data analytics and has software to help providers track patients throughout an episode of care. “We see a lot of fear and trepidation among the provider community about payment reform and what it'll mean for their businesses and practices and health systems,” he added.

Archway has been involved in helping providers implement the government's bundled-payment initiatives since the company's launch in 2014. It is also starting to receive more interest from commercial health plans and self-insured employers, Terry said. And competition is growing along with demand, he added. “It's obviously becoming a more crowded space.”

The performance services sector is also becoming increasingly diverse. Archway, for example, focuses solely on bundled payments. San Francisco-based startup Able Health helps physician organizations navigate a variety of value-based models with proprietary software that manages all of them in one place.

That software translates raw patient data into the proper formats for reporting, said Steve Daniels, Able Health's president and co-founder. “At the end of the year, reporting becomes much less stressful,” he said. Meanwhile, the software can also monitor performance and provide feedback in real time.

“If providers want measures that are able to represent the care that they're giving, then those measures have to be complex,” said Emily Richmond, Able Health's vice president of quality and performance improvement. “And if those measures are complex, providers have to understand that they're going to need technology.”