Despite progress in the movement to pay hospitals and doctors for the value of healthcare services they provide, the payment models implemented are not moving the needle on the cost and quality of healthcare, a new report suggests.
More than half of commercial payments to providers are tied to the value of those services in some way. Still, most of those value-based payments are built on a fee-for-service foundation and few pose any sort of downside risk to providers, the Catalyst for Payment Reform found in its latest national scorecard on payment reform.
"We've had tremendous growth in payment reform but not as much to show for it as we would like," said Suzanne Delbanco, executive director of the Catalyst for Payment Reform, an organization that advises employers and other healthcare purchasers. "What it signals to us is it's time to increase the size of incentives that are being offered to healthcare providers, as well as change the nature of them."
The Catalyst for Payment Reform has tracked the implementation of value-based payment among commercial payers and employers since 2012. The latest report includes data from an online survey by the National Alliance of Healthcare Purchaser Coalitions of 46 health plans representing about half of all commercially insured patients. Since 2012, the percentage of payments in value-based or alternative payment methods has grown to 53% in 2017 from 10.9%.
The types of value-based payments being implemented aren't necessarily the most effective. According to the study, 29.7% of commercial payments flowed through shared savings arrangements in 2017, up from 23.7% in 2016. Pay-for-performance arrangements accounted for 16.6% of payments, down slightly from 17%.
Shared savings and pay-for-performance methods involve some form of fee-for-service payment, according to the Catalyst for Payment Reform.
No payment method posing downside risk to providers has accounted for more than 4% of total payments in any year studied. Bundled payments, in which providers are paid a fixed price for an episode of care, accounted for just 2% of payments in 2017.
Full capitation, in which providers receive a set amount to manage a patient's entire care, accounted for 2.8% of payments. Shared risk and partial capitation models accounted for even less.
Meanwhile, there has been little to no improvement across a handful measures of quality and affordability that the Catalyst for Payment Reform looked at to assess the impact of payment reform. Nearly one in ten commercially insured patients in 2017 were unable to receive care because of cost concerns, compared with 7.5% in 2013, according to the Catalyst for Payment Reform's analysis of CDC data.
While there have been small upticks in the percentage of diabetes patients who had their blood sugar measured, children who received vaccinations, and patients who received instructions on recovering at home between 2012 and 2017, there were also small increases the share of patients with poorly controlled blood sugar, hospital-acquired pressure ulcers and cesarean sections among women with low-risk births.
The report sourced quality measures from several organizations, including the Leapfrog Group, the National Committee for Quality Assurance and the Agency for Healthcare Research and Quality, among others.
Delbanco said her organization's findings show that the implementation of shared savings programs might not be a powerful enough tool and encouraged the payment reform movement to strengthen provider financial incentives.
"We need to move more to downside financial risk for providers, at least for those that can handle it," she said.
