I was intrigued to dive into a new study that gauged perceptions of physicians and health plan executives on the healthcare industry’s journey from fee-for-service to value-based care. The research, from Quest Diagnostics, and which came out this week, had the key finding that 67 percent of 451 providers and health plan executives believe that the U.S. has a fee-for-service system versus a value-based care system.
As we reported earlier this week, the Quest study, titled “Stalled Progress on the Path to Value-Based Care,” is the third annual one, and revealed that just 27 percent of respondents believe that the U.S. healthcare system is a value-based one. What’s also important is that in last year's study, those numbers were 63 and 29 percent respectively, which suggests a perception that the healthcare industry has taken a step backward toward fee-for-service, researchers noted.
The reasons why so many of the survey respondents believe that the healthcare system is still operating in a fee-for-service infrastructure vary, but the majority of health plan executives said they now believe physicians do not have the tools to succeed under value-based care, a significant shift from last year when the majority said physicians had the tools.
What’s more, nearly three-quarters (72 percent) of all survey respondents said physicians do not have all the information they need about their patients, an increase of 12 percentage points from the 2017 study. Additionally, only 39 percent of physicians said electronic health records (EHRs) provide all the data they need to care for their patients.
The survey also revealed misalignment between physicians and health plan executives as it relates to quality metrics and technology. Eighty percent of health plan executives agreed with the statement that that investments made in technology for quality initiatives have improved the value of healthcare for patients, compared to only 68 percent of physicians— a 12-point delta. Additionally, 62 percent of health plan executives believe they have made progress toward alignment between payers and providers, but only 41 percent of physicians agreed.
Does the Survey Reflect What’s Happening, Industry-Wide?
It should be noted, of course, that this survey is just one of its kind, and is representative of a fairly small sample of providers and health plan executives. Separate research might garner different results. For instance, I point you back to this recent Change Healthcare study of 120 payers, which revealed, among an array of interesting findings, that nearly two-thirds of payments are now based on value, while “pure” fee-for-service is fading.
So, there are a few questions to examine here. For one, why are two different studies on the same issue generating conflicting results? And also, just how misaligned are providers and payers when it comes to their sentiments on how quickly the industry is moving toward value?
I think that in order to answer these questions, we first must take a look at how providers and payers respectively view things. Historically, providers have been financially incentivized to operate in a fee-for-service mindset, since more patient visits and more services rendered equals more money in their pockets. And although, yes, those incentives have started to change, many physicians are still most comfortable with practicing in that traditional sense.
To this point, while federal healthcare officials have clearly been pushing forward the value-based care train, especially in recent months, many providers are not adjusting well to how the government has proposed changes.
Consider this survey of nearly 1,000 physicians from last October: the majority (60 percent) of the physicians who responded believe that it will become more difficult to deliver high-quality care in the next two years, citing a complex regulatory environment, increasing administrative burdens and a more difficult reimbursement landscape. “After years of experimentation, physicians now want evidence that new models for care management, reimbursement, policy and patient engagement will actually improve clinical outcomes. Without it, they see little reason to alter the status quo and move toward widespread adoption,” the report authors stated.
Could these sentiments be affecting how physicians respond to surveys such as the Quest one? It would certainly make sense that the various provider frustrations with the value-based care shift—from complex reporting programs and requirements, to unproven returns on investments, to a lack of alignment with payers, to not having the adequate tools and data to thrive—would lead them to perceive the U.S. healthcare system as one that will be stuck in fee-for-service mode, at least for now.
Conversely, health plan executives might feel quite differently. The aforementioned Change Healthcare report found that payers reported success in reducing unnecessary medical costs as a result of their value-based care strategies. Medical cost savings topped 5.6 percent on average, with almost a quarter of respondents noting savings in excess of 7.5 percent, the research showed. As such, a Change Healthcare senior official noted in a statement that accompanied the survey, “Payers are finding the positive impact of value-based care as they scale these models—particularly episodes of care—and that's starting to bend the cost curve in a significant way.”
Indeed, many providers feel they are moving toward value too quickly, and are being asked to do too much, too soon, while payers feel that providers are actually moving too slowly. It really does depend on which side of the contracting table you’re on.
And certainly, it’s easy to see how people’s experiences impact their perceptions. For providers, a myriad of challenges and conflicting incentives are leading them to feel a certain way about value-based care, while for payers, who are tasked to reduce wasteful healthcare spending, processes certainly seem to be far less problemsome.
From a broader perspective, the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) are clearly and assertively pushing forward the proverbial value-based care train. Not only have we seen this in recent comments from federal health officials—such as HHS Secretary Alex Azar making the value-based care transformation one of the department’s top priorities going forward—but we have also seen qualitative evidence as well.
One major industry payer, UnitedHealthcare, recently reported that approximately $64 billion of the total annual payments UnitedHealthcare makes to care providers is tied to value-based arrangements. And last November, a report from the Health Care Payment Learning and Action Network (LAN) revealed that in 2016, 29 percent of total U.S. healthcare payments were tied to alternative payment models (APMs), such as shared savings/risk arrangements, bundled payments, or population-based reimbursements.
So, in the end, when pondering the question of if the value-based care train has stalled, the answer will depend on which side of the healthcare stakeholder table you are asking—payers or providers. And in a broader sense, I firmly believe that while the shift to value comes with its fair share of roadblocks (or should I say train track instead of road?), yes, the train is continuing to accelerate—with a clear end in sight.
Comments? Questions? Send to @RajivLeventhal or comment below.