The question facing U.S. health care organizations isn’t whether to embrace a risk-based care model, but rather how and when to make the change. With reimbursements increasingly linked to patient outcomes, adopting this new business strategy is crucial to every organization’s sustainability and success.
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The speed of transformation: Preparing for the payment models of tomorrow
Value-based care no longer qualifies as an experiment.
Accountable care organizations (ACOs) already cover nearly 33 million Americans — about 10% of the population.1 All but two states have now implemented value-based payment programs.2 And even health systems that have elected not to form or join ACOs are opting for alternative payment models (APMs) tied to quality and cost targets. In 2017, more than a third of U.S. health care reimbursements flowed through APMs — a 23% increase from two years earlier.3
Further proof of the accelerating transformation can be found in the Centers for Medicare & Medicaid Services (CMS) plan to launch new direct-contracting global fee models in 2020. That program alone is expected to shift a quarter of the Medicare population away from fee-for-service care.4
As the momentum continues, more and more providers are taking serious steps toward value-based care.
Medicare is setting the pace.
The combination of unsustainable increases in health care costs and the passage of the Affordable Care Act has hastened ACO growth and the shift of risk from payers to providers. Since 2011, the number of ACOs has grown from a nationwide total of 645 to more than 1,000.6 Much of that growth is due to Medicare ACOs, most of which participate in the Medicare Shared Savings Program.7
Commercial payers are fully engaged.
UnitedHealthcare®, the nation’s largest health insurer, currently covers more than 15 million patients through value-based plans, and by the end of 2020 expects to have $75 billion in reimbursements tied to such arrangements every year.8 Other payers — Aetna, Cigna and Humana among them — are on a similar trajectory.9
The Blue Cross Blue Shield plans say their value-based care programs now reach 62 million members nationwide.10 These private contracts account for more than half of the nation’s value-based business. What’s more, more than half of commercial ACOs are actively taking on risk — meaning they stand to lose reimbursement if they don’t meet quality or cost standards.11
Employers are joining the movement.
The National Business Group on Health reports that more than 20% of employees are engaging with high-value networks and ACOs, a number expected to top 50% within a few years.12
Cost-shifting to consumers, rising awareness of health care costs and a variety of mobile health applications are also fueling demand for transparency into prices and quality.
Consumers are taking a more active role.
Enrollment in high deductible health plans (HDHPs) has also increased rapidly in recent years, from 4% of covered workers in 2006 to 29% in 2018.13 Typically linked to high-deductible personal spending accounts and informative tools about care options, these plans drive value-based care delivery by encouraging consumers to make cost- and quality-conscious decisions.11
We are at the tipping point.
“It’s clear that you’re going to see more and more risk models,” said Alan Krumholz, MD, an independent consultant and former medical director at Mayo Clinic Health System’s health plan. “And if you see more and more risk models, then you have to align or incentivize physicians around risk models. We’ve reached the tipping point, and we’re starting to go downhill now.”
This white paper will examine how they can prepare to more readily assume the risks — and enjoy the benefits — of this evolving payment paradigm.
Accelerate your preparations. Read the entire white paper today.
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Optum is a leading information and technology-enabled health services business dedicated to helping make the health system work better for everyone. We deliver integrated solutions infused with OptumIQTM, our unique combination of data, analytics and health care expertise, to help modernize the health system and improve overall population health.
Explore more at optum.com/CFO.
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