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Survey: 50 Percent of Health Systems Receive Value-Based Payments

January 24, 2017
by Heather Landi
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A recent KPMG survey found that half of health systems report at least some of their revenue comes from value-based payments, yet nearly a quarter of survey respondents indicated they are not making the move to value-based payments.

The KPMG survey is based on feedback from 86 respondents who identified themselves as working for a payer or healthcare provider,

For the survey, KPMG asked survey respondents where they stand with value-based payments and 36 percent said “some of our revenue is generated by value-based payments and 14 percent said the majority of revenue is generated by value based payments. A quarter of respondents (26 percent) said they are planning to enter value-based payment arrangements in the next one-to-three years and only 7 percent of the organizations said they are not. The remaining 17 percent of healthcare organizations said they don’t require value-based payments.

“It is not necessarily a surprise that nearly a quarter of providers are not acknowledging the need for value-based payments,” KPMG Partner Joe Kuehn said in a prepared statement. “Various parts of the country are transitioning at a slower pace. The vast majority of health plans and providers, however are moving this way, particularly after CMS had set some aggressive targets in January 2015, followed by some of the national health plans, to shift their reimbursement in this direction.”

The survey also focused on population health programs, which are aimed at improving quality and access to care while reducing costs for a designated group of patients, and the survey responses indicate that population health programs are taking hold at health plans and providers.

In the survey, 44 percent of respondents at payer and providers found that they have a population health platform in place that is being “utilized efficiently and effectively.” Another 24 percent are in the process of implementing a population health program within the next three years. Only 10 percent said they have no plans to implement a population health platform and another 21 percent of respondents said their organization doesn’t require a population health platform.

Healthcare provider and health plans see this happening despite challenges associated with moving away from fee-for-service payment models, which have been in effect for decades, and toward alternate payment methods that are tied to quality, bundled contracts or other means.

“The move to population health is very encouraging given that nearly half of providers and payers are seeing the benefits,” Michael Beaty, a principal at KPMG’s Healthcare & Life Sciences practice, said in a statement. “Providers are taking on more financial risk from these programs, but they have a greater opportunity to share from savings. Payers gain from administrative efficiencies and letting providers take on that risk.”

The biggest individual barrier to implementing a population health program is aggregating and standardizing information from multiple sources, 30 percent of respondents said. Respondents also cited stakeholder adoption (10 percent) and integrating with clinical work flows (10 percent) as additional barriers. Another 34 percent cited “all of the above” which includes those barriers, as well as enabling patient engagement, funding investments, and selecting appropriate vendors as additional challenges.

“The complaints about incorporating technology into clinical workflows are fairly common and have many doctors and others involved with care delivery dissatisfied with electronic health records and other tools,” Todd Ellis, principal at KPMG who co-hosted a Webcast titled Lessons from the Front Lines: Building your population health program – it’s not as easy as it sounds, with Beaty and Kuehn. “This can be remedied by better training and incorporating clinicians into

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