Survey: Healthcare Industry Managers Expect Value-Based Contracts to Hurt Profits | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Survey: Healthcare Industry Managers Expect Value-Based Contracts to Hurt Profits

June 20, 2014
by Rajiv Leventhal
| Reprints

Healthcare industry managers and executives are expecting profits to be hurt from the introduction of value-based contracting, according to a survey conducted by KPMG the New York-based audit, tax and advisory services firm.

The survey, which polled 240 representatives from hospitals, physician practices, health plans and pharmaceutical companies, found that approximately one third of healthcare managers said they expect value-based contracts to dampen operating results. In fact, more than 12 percent of the respondents expect operating income to fall 10 percent or greater from these agreements. 

"Ultimately, all stakeholders who drive their organizations to achieve efficiency in operations, quality outcomes, adoption of supportive technology, and a patient-centric culture, will not only survive but see their margins grow in the future. Building the bridge to that future is the key now," Cynthia Ambres, M.D., partner and member of the KPMG Global Healthcare Center of Excellence, said in a statement.

Respondents from hospitals, health systems and large physician groups appear especially pessimistic about the impact of value-based contracts, with 49 percent expecting lower operating profits. 

Greater use of disease management, which places a greater emphasis on helping patients manage chronic illnesses such as diabetes and cardiovascular disease, is the most significant change to result from value-based contracts, according to 28 percent of survey respondents.  Another 19 percent project a greater reliance on nurse practitioners and physicians assistants as the most significant change.   

Additionally, the survey found that nearly a third of executives and managers (31 percent) expect clinical information technology to have the biggest impact on the quality of care and patient outcomes—ahead of financial performance (15 percent), clinical operations (13 percent) and patient engagement (7 percent) among other factors. 

Get the latest information on Finance and Revenues and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

NewYork-Presbyterian, Walgreens Partner on Telemedicine Initiative

NewYork-Presbyterian and Walgreens are collaborating to bring expanded access to NewYork-Presbyterian’s healthcare through new telemedicine services, the two organizations announced this week.

ONC Releases Patient Demographic Data Quality Framework

The Office of the National Coordinator for Health IT (ONC) developed a framework to help health systems, large practices, health information exchanges and payers to improve their patient demographic data quality.

AMIA, Pew Urge Congress to Ensure ONC has Funding to Implement Cures Provisions

The Pew Charitable Trusts and the American Medical Informatics Association (AMIA) have sent a letter to congressional appropriators urging them to ensure that ONC has adequate funding to implement certain 21st Century Cures Act provisions.

Former Michigan Governor to Serve as Chair of DRIVE Health

Former Michigan Governor John Engler will serve as chair of the DRIVE Health Initiative, a campaign aimed at accelerating the U.S. health system's transition to value-based care.

NJ Medical Group Launches Statewide HIE, OneHealth New Jersey

The Medical Society of New Jersey (MSNJ) recently launched OneHealth New Jersey, a statewide health information exchange (HIE) that is now live.

Survey: 70% of Providers Using Off-Premises Computing for Some Applications

A survey conducted by KLAS Research found that 70 percent of healthcare organizations have moved at least some applications or IT infrastructure off-premises.