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Survey: Shift to Value-Based Care in Hospitals Growing Significantly

April 7, 2015
by Rajiv Leventhal
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The momentum of healthcare’s progress toward a value-based business model is gaining speed, according to results of two recent surveys from the Skokie, Ill.-based consulting firm Kaufman, Hall & Associates, LLC.

Responding hospitals reported that the use of value-based contracts increased significantly over a six-month period. The percentage of hospitals reporting that 10 percent or more of their revenue comes from value-based contracts almost doubled between August 2014 and February 2015, from 22 percent to 42 percent.

 The two surveys found even more growth in expectations for future use of value-based payment. The percentage of responding hospitals anticipating that value-based contracts will constitute 50 percent or more of their revenue within the next 24 months tripled compared with six month previously, from 7 percent to 22 percent. In another sign of healthcare’s shifting business model, 85 percent of respondents reported an increase in outpatient visits in the last six months of 2014, up from 72 percent in the first six months of 2014.

These findings come on the heels of two high-profile national commitments to escalate use of value-based payment. On Jan. 26, the Centers for Medicare & Medicaid Services (CMS) announced its goal to move 50 percent of Medicare payment to a value-based model by 2018. Two days later, the Health Care Transformation Task Force, composed of influential payers and providers, committed to having 75 percent of its business in value-based arrangements by 2020.

“These findings suggest that more providers are viewing the movement toward value-based payment as inevitable,” Mark E. Grube, managing director, Kaufman Hall, said in a news release statement. “As the shift from volume to value gains momentum, hospitals and health systems need to move quickly to understand the likely trajectory in their markets, to identify their desired role, and to make the significant structural and operational changes needed to succeed in the changing business model.”

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