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Survey: 73 Percent of Physicians Prefer Fee-for-Service Models

October 12, 2017
by Heather Landi
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A survey of 980 physicians by New York City-based Bain and Company, a management consulting firm, found resistance among physicians to the transition to value-based care and payment models, and 60 percent said it will be more difficult to deliver high-quality care in the next two years.

Bain’s “2017 U.S. Front Line of Healthcare Survey” examines practitioners’ attitudes and concerns during a period of pivotal change for the industry. To better understand the evolving reality on the front line, Bain’s gathered input across the country from 980 physicians in eight specialties, 100 finance officers and 100 procurement officers.

As the report authors note, the survey findings reflect an industry in the “crosscurrents of change,” as the healthcare industry is still in search of breakthrough models that can deliver high-quality care at lower cost. What’s more, the survey was conducted at a time when there are many open questions about the future of the Affordable Care Act, drug pricing and other regulations.

However, the report authors contend that the business insights identified in the survey will hold up under a broad range of policy outcomes. “Our research focused not on how healthcare is funded, but on physicians’ and administrators’ priorities in care delivery—and the critical question of who has decision-making authority in the evolving healthcare system,” the report authors wrote.

More than 60 percent of the physicians responding to the survey say it will become more difficult to deliver high-quality care in the next two years, citing a complex regulatory environment, increasing administrative burdens and a more difficult reimbursement landscape. “After years of experimentation, physicians now want evidence that new models for care management, reimbursement, policy and patient engagement will actually improve clinical outcomes. Without it, they see little reason to alter the status quo and move toward widespread adoption,” the report authors state.

What’s more, the report authors wrote, “Is there a way forward? Our survey findings indicate that bringing physicians back into the decision-making process helps create greater momentum for change. Physicians who are not aligned and engaged with their organizations have more reasons to resist new structures and systems, such as value-based payment models. By contrast, those who have a say in management decisions are much more satisfied with their working environment and more willing to lead change.”

The report authors state that the survey findings indicate that change has slowed. “Physicians are particularly hesitant to embrace new systems when the clinical implications and the return on investment are unproven and the administrative burden significant. As a result, many smaller physician-led practices may opt out, relying on a traditional approach to management and care,” the report authors wrote.

Comparing 2015 and 2017 survey findings, one notable slowdown has been in the adoption of value-based payment models. “Many physicians anticipated a broad rollout of value-based care two years ago and a corresponding decline in practices using the traditional fee-for-service model. But few have been persuaded to switch, noting a lack of evidence that outcomes are the same or better using value-based care,” the report noted.

The survey found that nearly three quarters (73 percent) of physicians prefer to use a fee-for-service model, citing concerns about the complexity and quality of care associated with value-based payment models. Fifteen percent prefer pay-for-performance and 8 percent of respondents prefer capitation. The survey cites several reasons given by physicians for favoring fee-for-service: “Results in best patient care;” “Offers the best financial reward;” and “With pay for performance, we end up doing many things for our patients for which we don’t get paid.”

The survey also found that physicians believe fee-for-service is more expensive than other models, with 48 percent saying it increases patient costs and 14 percent saying it decrease costs. Twenty-seven percent believe pay-for-performance increases costs and 17 percent believe capitation increases patient costs.

However, the survey found that physicians are concerned that more advanced value-based care models negatively affect the quality of care. More than half (53 percent) of physicians say that capitation reduces the quality of care and 21 percent say pay-for-performance reduces the quality of care. Yet, almost half (46 percent) believe pay-for-performance models improve care quality, while fewer physicians, 40 percent, believe fee-for-service models improve quality of care. Only 15 percent think fee-for-service worsens the quality of care.

Further, many believe their organizations are not sufficiently prepared for the shift to value-based care, especially in the areas of risk management and organizational alignment. When gauging their readiness for certain aspects of value-based care, physicians responded that they were somewhat or very prepared in these areas: established network of providers and sites of care (75 percent); effective medical coding and billing processes (75 percent); ability to work in interdisciplinary teams (72 percent); robust integrated data management systems (70 percent); established care protocols and mechanisms to track compliance (65 percent) and effective patient engagement programs (63 percent).

On the IT side, about 65 percent of respondents said they have the user-friendly, patient-facing IT needed to support value-based care. About 60 percent of physicians said they had sufficient financial resources and accurate underwriting, pricing and contracting capabilities to support value-based care.

Despite the reluctance to drop fee-for-service payment systems, many organizations continue to experiment with value-based care as part of a mix of payment models, the report noted. “Providers that want to move toward value-based payment models can generate greater support by working closely with their physicians to shape these models and addressing their concerns about outcomes, simplicity and fairness to all stakeholders,” the report authors stated.

The report authors contend that many healthcare provider organizations have overlooked the role of the physician as system innovator. “Physicians tell us that they are open to new cost-saving models, but need to be on the front line of change helping health systems identify which approaches create value for patients, and which don’t. For example, clinicians’ and administrators’ views differ on the importance of cost-saving initiatives. Physicians and finance officers rank care-management teams the top priority, while procurement officers say vendor consolidation and purchasing automation are most important,” the report authors wrote.

In fact, the survey found that at physician-led practices, physicians tend to be more satisfied with their employer. Physicians at physician-led practices feel inspired by the organization’s mission (80 percent) and feel sufficiently engaged in decisions about strategic direction (83 percent). “Physicians in management-led organizations on average are less inspired, less aligned and less likely than peers in physician-led practices to believe that they are sufficiently engaged in making important decisions about strategic direction and operations,” the report authors stated.

“The key message of our 2017 survey is that future progress depends on physicians shaping and leading change. Healthcare organizations that engage and empower physicians are likely to lead the next wave of innovation. Proving the clinical and financial benefits of new systems and tools while reducing their complexity is essential to overcoming physician skepticism. Those efforts will take time, but they will help provide new momentum for change,” the report authors wrote.

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