Docs taking on full risk in value-based care models still years away

The healthcare industry is likely still several years away from assuming full risk in value-based payment models, according to a new survey.

A market in which the majority of value-based relationships include both upside and downside shared risk is three to five years off, according to nearly 40% of 185 healthcare executives surveyed by the HealthCare Executive Group and Change Healthcare. About 17% said it will take five or more years and 6% said it will never happen. These new payment programs seem perpetually stuck in a state of delay, researchers said.

Providers are participating in Medicare shared-savings programs, bundled payments and other new payment models. But adoption is slow. If they are implemented, they typically don't have downside risk, and the providers aren't on the hook for losses.

Limitations in data sharing, no agreement on outcome measures, and a lack of incentives for payers and providers to work together have stymied value-based agreement adoption. Payment reform has been on the survey's top-10 priority list for 10 years, researchers noted.

Providers and insurers do not want to give their competitors an edge and have typically shied away from data sharing. The CMS has also sent some mixed signals related to voluntary or mandatory models, which may have slowed progress, said Dr. Andrei Gonzales, assistant vice president of value-based payments for Change Healthcare.

One survey respondent said there is misalignment in stakeholders' primary objectives and how they operate and use clinical data. There are a number of attempts to move forward on a large scale, which is often too overwhelming to successfully implement, the respondent said.

"There is activity in value-based care, but what we see as the biggest challenge is provider engagement," Gonzales said. "Providers need to understand how to be successful in value-based arrangements."

Healthcare executives' expectations follow the latest research. According to last year's Moody's Investors Services report, only 1.6% of not-for-profit and public hospitals' net patient revenue came from capitation in 2017, inching up from 1.1% in 2013. Other risk-based payments only accounted for 1.2% of their revenue in 2017. Most reimbursement was still derived from diagnosis-related group payments, Moody's data show.

Payers need to standardize quality and outcome measures, co-develop payer-provider risk management programs and share performance data, executives said.

Money, unsurprisingly, would be the most effective incentive to facilitate data sharing, followed by patient-provider integration, respondents said.

The survey also touched on nontraditional competitors, which broke the top 10 for the first time this year while issues like consumerism and analytics remain multiyear priorities. A third of the respondents said nonhealthcare market entrants could upend industry business models.

Stakeholders have tried to insulate themselves through horizontal and vertical integration, said David Gallegos, senior vice president of consulting services for Change Healthcare Consulting. Some are spinning off technology solutions or buying new applications, he said.

"A lot are still sitting by and watching," Gallegos said, adding that many still operate on their legacy systems that have contributed to a fragmented industry.

Ten percent of respondents said they were not integrating social determinants of health into their population health programs, which contradicts much of the hype around community outreach. Around 18% said they were actively coordinating programs with community groups.

Respondents didn't seem to have robust strategies to enhance patient engagement. Only 11% said that their organizations are identifying communication preferences.

Organizations are only beginning to realize that reaching beyond a doctor's office makes the biggest impact, Gallegos said.

"If they can impact a person's life through nutrition, exercise, housing, and in particular behavioral health, that can have a greater impact than anything else you do," he said.

About two-thirds said their organizations will address care coordination over the next year. The next-highest priorities were transportation, food insecurity/access, benefits coordination for public assistance and loneliness. Inadequate payment structures, a lack of effective metrics, patient adoption and data sharing limitations were among the biggest barriers to pursuing population health programs.