When it comes to value-based reimbursement (VBR) in U.S. healthcare, one inevitably finds oneself these days reaching for transportation-based metaphors, around ships sailing and trains leaving the station. And there’s a good reason for that: a phenomenon that was seen as very “leading-edge” just two or three years ago, really is no longer so. Indeed, that fact was confirmed by the results of a just-released survey on the subject, published in the form of a white paper by ORC International, and commissioned by McKesson Health Solutions.
As we reported today, the results of the survey confirmed that a majority of hospital executives are now reporting that they are receiving at least 50 percent of their payment in the form of value-based reimbursement, which represents a 4-percent increase over the past two years. Meanwhile, payer executives told ORC International that 58 percent of their business has already shifted to VBR, representing a 10-percent increase since 2014, the last time the survey was executed.
Now, let me put a grain or two of salt into this mix: the total number of survey respondents was 465, which, as these things go, is not a huge survey sample—though to be clear, it is not insignificant, either. That having been said, the survey results are noteworthy. This year, 63 percent of hospitals surveyed are now a part of an accountable care organization (ACO) of some kind, an increase of 18 percent over 2014. And among hospitals that are not part of an ACO, 47 percent anticipate joining one within five years.
Even more dramatically, over 60 percent of payer respondents told ORC that they’ve changed network strategy since 2014, with 53 percent now using tired, and 42 percent now using narrow, networks. What’s more, over 80 percent of payer executives told survey leaders that they’re more selective these days regarding the hospitals they include in their networks, with 75 percent saying that care quality is their top driving factor.
What is worrisome is a set of results around, well, the results so far for hospital-based organizations with regard to their experiences with accountable care and value-based reimbursement. As the report notes, “A mere 22 percent of hospitals are meeting their goal to reduce administrative care costs, only 26 percent are meeting goals to lower healthcare costs, and just 30 percent are meeting care coordination goals. Looked at another way,” the white paper’s authors write, “60 percent to 78 percent of providers say they’re not meeting their alternative payment and value-based reimbursement goals.”
And it is those survey results that speak to where hospital leaders really are right now with regard to accountable care and value-based reimbursement. The reality is that hospital leaders are still very early in their journey around mastering even the basics of value-based payment—and that is true even when they are working together with health plan leaders in very collaborative relationships.
Certainly, mastery of the leveraging of data, along numerous dimensions, is going to be one essential key to success in all these areas. Hospital leaders are finding themselves awash in data, and yet so much of that data remains ungoverned or unmanaged or unusable. Instead, hospital leaders need to marry clinical data from their electronic health records (EHRs) and other clinical information systems, to any claims data they’re receiving, either from the Medicare program or from the commercial health plans with whom they’re collaborating on ACOs. And then they need to learn how to continuously analyze the right kinds of data, and most importantly, develop processes that connect such data-driven activities as health risk assessment of populations with the care management of the high-risk and rising-risk members of those same patient populations.
Are the results of the survey that formed the basis for this white paper in any way surprising? Nope, not at all. But they do point up how early on in their journeys most hospital organizations are, around value-based care delivery and payment, accountable care, and population health management. They also speak to how tremendously fragmented our strategic planning, strategic execution, and management remain, in most patient care organizations nationwide.
Yet here we are, shifting into the new healthcare, with provider leaders realizing just how many deficits they’re working with—deficits around data, to be sure, but also very much around process—and yes, leadership.
And yet, at what seems like a tremendous point of inflection in U.S. healthcare, CIOs, CMIOs, and other healthcare IT leaders have unprecedented opportunities to lead. Because none of this will advance without their leadership and facilitation—and the skills, knowledge, and insights they can bring to the table are going to be essential for their organizations’ success. But the results of this recent survey certainly confirm what a long journey lies ahead for everyone. And that feels bracing, and yet at the same time, quite clarifying, really. In any case, whether one wishes to imagine a train leaving the station, or a ship sailing from its home port, the vehicle of transportation involved has definitely left its launching place—and regardless of the specific metaphor, the journey is engaged.