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Healthcare Execs Expect Payment Model Change, Report Reveals

August 28, 2012
by Gabriel Perna
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According to a recent survey from KPMG, a New York City-based audit, tax and advisory firm, healthcare executives are expecting major business model changes over the next five years. The survey of over 200 senior healthcare and pharmaceutical executives revealed that 65 percent of provider executives and 41 percent of health plan executives are expecting major business model changes over five years, while 63 percent of pharmaceutical executives expect only moderate changes.

In addition, nearly half of providers and health plans, and a third of pharmaceutical executives would like to see a more rapid progression to some type of value-based payment.  Most, however, anticipate that transition will in fact be accomplished more gradually than not, with less than a quarter of all provider reimbursement fashioned as some type of value-based payment, according to the findings. 

There was uncertainty across the board. Forty percent, 53 percent, and 43 percent of systems, plans and pharmaceuticals, respectively said that their current business model was somewhat sustainable over the next five years, while 20 to 27 percent of respondents in each group said current business models were either not very or not at all sustainable over the next five years.

“Organizations are clearly considering the effectiveness of their fee-for-service business models but migration to more value-based models will take some time, and will include a mix of old and new delivery and payment systems," Ed Giniat, national sector leader at KPMG Healthcare & Pharmaceuticals, said in a statement. "The only way for more rapid integration to occur is for these stakeholders to lead the change and make it happen, but many of these organizations are using techniques more aligned with sustaining existing models."

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