June 25, 2018
Dive
Brief:
- Value-based
payment models had no impact on cost or clinical outcome reduction in
their early years, a new study from the Health Financial
Management Association concludes. The authors used commercial data from
2012-2014 and Medicare data from 2007-2015.
- Researchers
attributed the finding to myriad of factors, including the limited
prevalence of value-based models in many markets, lack of strong financial
incentives for managing the total cost of care, healthcare organization
preference for an incremental approach to risk and employer reluctance to
change benefit design.
- The study also found markets with
less consolidation and vertical alignment tended to have higher costs,
while markets with well-organized provider networks had lower
costs. HFMA President Joseph Fifer said in a statement that this
suggests the type of consolidation may matter more than the volume of activity.
Dive
Insight:
While
population- and value-based models are rising in popularity and use, the study
shows they have a ways to go before a discernible impact on whittling down the
total cost of care.
Since
these models were in their nascence during the time of analysis, the study
authors concede more time and evidence are needed to get a clearer picture of
their efficiency.
Considering
the growing presence of population- and value-based models in both government
and commercial plans, researchers analyzing the impact they have on cost will
be sure to have that time and evidence in the near future. Just last
month, UnitedHealth Group CEO David Wichmann told investors he expects 150
million U.S. consumers to be in value-based coordinated care programs by
2025.
A
recent Change Healthcare survey of
120 payers found insurers are moving away from fee-for-service and more toward
value-based care faster than expected. For the first time, private payers are
leading the way in implementing value-based models, rather than government
programs. The survey also found payers need time to actually implement these
models, with more than a third of respondents saying they need at least one
year.
Population-
and value-based models aren't the the only market variables impacting costs.
The HFMA study aimed to identify how other factors, including social
determinants, demographics, disease prevalence and quality of care influence
growth in the total cost of care for Medicare. Overall, 23 factors identified
by the study's authors accounted for 82% of baseline cost variation and
only 27% of variation in cost growth.
Researchers
also found that employers in most markets were "reluctant to change
benefit design or choose health plans that might be perceived as limiting their
employees’ choice of provider," with some even being skeptical about the
merits of population- and value-based models.
Study
authors suggested government and commercial payers begin adopting
"population-based models that represent sufficient revenue to incentivize
providers to actively manage the total cost of care, while acknowledging that
other models may turn out to be more appropriate in some circumstances."
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