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Financial Exec Survey: Interoperability Key Obstacle to Value-Based Payment Models

February 15, 2018
by Heather Landi
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Momentum continues to grow for value-based care as nearly three-quarters of healthcare executives report their organizations have achieved positive financial results from value-based payment programs, to date, according to a new study from the Healthcare Financial Management Association (HFMA).

However, significant barriers remain in the movement to value-based payment programs, including organizations’ limited capabilities for sharing clinical information among hospitals, physicians and health plans, which is slowing the transformation of the nation’s health care payment system. The study, sponsored by Humana Inc., is based on a survey conducted in September 2017 of financial executives in hospitals and health systems about their organizations’ value-based payment readiness.

The survey found that interoperability remains a critical focus. Nearly three in four (74 percent) of executives cited interoperability, the need to improve capabilities for aggregating clinical information across networks and between hospitals and physicians, as an extremely important need. Concerns about interoperability have increased since the original study was conducted in 2015. That study found 68 percent of respondents rated interoperability as an extremely important need at that time. Additionally, half of respondents in the 2017 study describe interoperability improvement across health networks with health plans as extremely important.

The results are also similar to a study by the American Academy of Family Physicians, sponsored by Humana, which found that value-based care continues to make progress but faces challenges. Researchers also found that value-based payment adoption among health care providers has increased and return on investment (ROI) has improved since the original study was conducted in 2015.

Overall, the survey results indicate that momentum continues to grow for value-based care. Health plans’ use of value-based mechanisms has increased from 12 percent to 24 percent since 2015. However, in 2015, utilization of value-based mechanisms by health plans was projected to reach 50 percent in 2018, according to the study.

Looking at the penetration of value-based payment in negotiated governmental plans, the use of value-based mechanisms in Medicare Advantage and managed Medicaid plans stands at 26 percent in 2017, compared to 21 percent in traditional Medicare and 14 percent in non-managed Medicaid plans.

And, noted above, 74 percent of respondents report their organizations have achieved positive financial results (return-on-investment) from value-based payment programs to date; higher than the 51 percent of executives reporting positive financial results in 2015.

However, there are several key obstacles to value-based payment that continue to challenge healthcare organizations. According to the survey, about three-quarters of respondents stated that regulatory uncertainty, including the Medicare Access and CHIP Reauthorization Act (MACRA), has a negative effect on their ability to forecast the financial impact of value-based payment. MACRA encourages physicians and other eligible professionals to participate in alternative payment models that would hold them accountable for quality and cost of care.

Beyond limited ability to access, collect, and manage clinical data, respondents also cited lack of resources, both staffing and financial resources, as a significant challenge related to value-based payment, as well as inconsistencies among payers (i.e., measures, access to data from payers, contracting), and lack of physician alignment and support.

The survey also examined healthcare organizations’ capabilities in areas that support value-based payment.

Sixty-five percent of respondents report their organizations do not have tools or technology to assist in specialty and/or inpatient care to help control and manage costs. A majority of respondents also view chronic care management as a significant readiness gap in the next three years.

“Interoperability has the challenge of collecting fragmented health data and exchanging the information across multiple systems.  In addition, it must provide physicians access to comprehensible patient health information at the right time for informed decision making and better efficiencies.  Overcoming the interoperability barrier becomes even more important for treating patients with chronic conditions as they generally see multiple physicians and specialists,” Roy Beveridge, M.D., Humana’s Chief Medical Officer, said in a statement.

Some hospitals are developing capabilities to gather data and address social needs. However, leveraging social determinants of health remains a challenge. More than six in 10 respondents (63 percent) report that their organizations do not consider social determinants of health, such as food insecurity, in their overall strategy and cost planning.

The finance executives participating in the study called on health plans to facilitate growth of value-based payment by developing smarter incentives that are aligned with provider needs and care objectives, sharing their data with providers, committing to transparency in the spirit of partnership, and standardizing programs, measures, and processes.

“Collaboration among health systems, physicians, and health plans is the key to growing value-based payment,” HFMA president and CEO Joseph J. Fifer, said in a statement. “Technology and other obstacles can be overcome if all stakeholders commit to working together for the benefit of the people we serve.”

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