Health execs support value, but don't know how to get there
The industry supports the tenets of alternative payment models (e.g., higher quality, more coordinated care; reducing healthcare ‘waste’ and improving efficiencies), but finds that actually doing so is incredibly difficult, according to the findings of a new report from PwC's Health Research Institute.
“Healthcare’s Alternative Payment Landscape” found that most health system executives said they support the move away from fee-for-service (FFS), but continue to struggle with how much they should invest in payment alternatives.
“The industry is seeing major purchasers of care—Medicare, Medicaid, private insurers, employers—demand a better accounting for the money they spend on care. CMS has made payment reform its number one priority, as evidenced by the goals it set earlier this year,” according to Ceci Connolly, managing director of PwC’s Health Research Institute.
New payment models, such as accountable care organizations (ACOs), bundled payments and ultimately capitation, are growing in numbers, despite uncertainty from the industry, Connolly explains. “Ultimately, the demands of the ‘new health economy’ are forcing the industry to change,” she says.
The Centers for Medicare & Medicaid Services (CMS) is providing the impetus to make the switch.
“It has set goals to have half of all Medicare payments tied to alternative payment models, and 90% of all of its payments tied to quality improvement programs,” Connolly says. “It’s a short window, too. CMS expects this to happen in 2018. And the agency has made participation mandatory in some of its bundled payments demonstrations, including one that will pay a set fee for hip and knee replacements. That program is mandatory for some 700 health systems.