As the American healthcare system struggles to get its skyrocketing costs under control, many payers are exploring value- and performance-based payment models in which providers are reimbursed for positive outcomes. Most analysts believe such payment systems, which offer lower costs for payers, are the wave of the future.
The newer model encourages providers to better collaborate on care, provide treatments and services customized to each person receiving them, and to focus more on driving positive health outcomes. Aside from the lower costs and better care already resulting from the trend, it may also improve health literacy by making healthcare systems easier for people to navigate, understand, and use.
To illustrate, Cigna aimed to increase value-based payments to 90 percent of its spending in 2018. Aetna plans to funnel 75 to 80 percent of its spending into value-based contracts by 2020, with researchers there expecting value-based care to account for 59 percent now of all U.S. healthcare payments by 2021. And in a 2017 study, UnitedHealthcare announced its goal to tie $65 billion of spending to value-based U.S. contracts by the end of 2018.
“This is an important change from the traditional, 75-year-old health care system based on fee-for-service, whereby the more services providers delivered the more they got paid,” notes the UnitedHealthcare study. “Moving to value-based care can include different payment models, such as shared savings programs and bundled payments, as well as more integrated clinical models such as accountable care organizations and patient-centered medical homes.”
Likewise, The Department of Health and Human Services (HHS) is prioritizing value-based models. Secretary of HHS Alex Azar confirmed that the Center for Medicare and Medicaid (CMS) aims to incentivize this shift in focus.
“If you talk to any patient about what they want from healthcare, it’s outcomes, not process. Ultimately, that is what should drive providers, too,” said Azar.
Furthermore, the trend is not limited to primary care. So what are some outcomes-based initiatives being implemented or considered through Medicare and Medicaid in various areas?
This trend isn’t exclusive to funders. State regulatory bodies are also looking at performance-based models and criteria. They are increasingly interested in prevention and methods to address social determinants of heath. The future is undoubtedly in favor of providers that can implement strong performance management practices.