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April 27, 2022
David Burda
Economics Outcomes System Dynamics

Providers’ List of Value-Base Care Reimbursement Demands

By any measure or definition, we’re a long way from full adoption of value-based care reimbursement in the U.S. The questions are why and what can we do about it? All we know as consumers of medical care and journalists who write about these things are what payers and providers tell us about why payments still aren’t based on outcomes.

The latest list of excuses comes from a NEJM Catalyst survey of 719 healthcare provider executives who are members of NEJM Catalyst’s Insights Council. The respondents included executives, clinical leaders and clinicians at hospitals, health systems, clinics, physician practices and other provider organizations, most of which were not-for-profits at the time of the January survey.

NEJM Catalyst published the survey results in the May edition of its Innovations in Care Delivery journal. You can download the results here.

The executives agreed that not everything is rosy in VBC-land. For example, 65% of the respondents said payers and providers are “not very aligned” on value-based care overall with 17% saying  the sides are “not at all aligned.” That’s about the same breakdown from a similar survey NEJM Catalyst did in 2018. So, not much has changed in four years in the minds of these provider executives.

Yet, at the same time, they all know VBC adoption is good for everyone.

  • 83% said the quality of care would be “better” or “much better”
  • 78% said the cost of care would be “better” or “much better” as in lower or more affordable
  • 75% said the patient experience would be “better” or “much better”
  • 74% said the clinical experience would be “better” or “much better”

That’s the Quadruple Aim, by the way. Improving health equity is the fifth Aim, but that’s a topic for another podcast. The Feb. 11 episode of our 4sight Friday Roundup podcast, “Can We Cure Structural Racism in Healthcare With a Fifth Aim?” to be exact. For what it’s worth,  44% of the respondents said race and equity measures should not be incorporated into VBC payment models. I’m not sure that’s a good look. Again, a topic for another time.

Anyway, so what’s the deal if only good things happen from VBC models yet payers and providers can’t get on the same reimbursement page?

Here are the top six (two tied for fifth) reasons cited by the provider respondents in the NEJM Catalyst survey. Specifically, these are the biggest changes they said need to be made in current payment models to move VBC reimbursement forward:

  • Quality and outcomes-driven payment and incentive models
  • Adequate reimbursement for providers that reflects complexity of care
  • Alternative payment models, reduction of fee-for-service model
  • Incentive and goal alignment for payers, providers and patients
  • Simplify coding and billing; reduce pre-approvals, denials, and appeals
  • Transparency

Seems to be a pretty intractable list of demands to me. I don’t see payers saying, “Sure! We’ll give you more money for patients you say are sicker and, hey, we’re not even going to check your bill!”

I think providers know that, too. Fifty-eight percent of the respondents said they think the amount of money that flows through VBC reimbursement models will “increase somewhat” over the next two to three years. Twenty-seven percent said VBC-based dollars will stay the same for the next two or three years. Not exactly an optimistic forecast.

I know lots of smart, creative, innovative people are working on this VBC adoption challenge. But until payers and providers are willing to compromise for the greater good, i.e., improved access to better care at more affordable prices, this VBC reimbursement transition is going to take way longer than expected.

Thanks for reading.

To learn more about this topic, please read, “Is Value-Based Reimbursement Mostly Dead or Slightly Alive?” on 4sighthealth.com.

About the Author

David Burda

David Burda began covering healthcare in 1983 and hasn’t stopped since. Dave writes this monthly column “Burda on Healthcare,” contributes weekly blog posts, manages our weekly newsletter 4sight Friday, and hosts our weekly Roundup podcast. Dave believes that healthcare is a business like any other business, and customers — patients — are king. If you do what’s right for patients, good business results will follow.

Dave’s personnel experiences with the healthcare system both as a patient and family caregiver have shaped his point of view. It’s also been shaped by covering the industry for 40 years as a reporter and editor. He worked at Modern Healthcare for 25 years, the last 11 as editor.

Prior to Modern Healthcare, he did stints at the American Medical Record Association (now AHIMA) and the American Hospital Association. After Modern Healthcare, he wrote a monthly column for Twin Cities Business explaining healthcare trends to a business audience, and he developed and executed content marketing plans for leading healthcare corporations as the editorial director for healthcare strategies at MSP Communications.

When he’s not reading and writing about healthcare, Dave spends his time riding the trails of DuPage County, IL, on his bike, tending his vegetable garden and daydreaming about being a lobster fisherman in Maine. He lives in Wheaton, IL, with his lovely wife of 40 years and his three children, none of whom want to be journalists or lobster fishermen.

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