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    Top Obstacles to Value-Based Payment


    While progress continues in areas such as value-based payment adoption and more financial executives experiencing a positive return on investment (ROI) in value-based payment models, substantial barriers still exist, according to a study conducted by the Healthcare Financial Management Association (HFMA) and sponsored by Humana.

    Some of these gaps include interoperability, assessing ROI, and chronic care management.  However, the most dominant need is specifically tied to internal and external interoperability.

    This was a follow-up study to a similar study in 2015. This study was derived from a survey sent to members of HFMA and focused on value-based payment readiness.


    “In this changing healthcare landscape, we believe it’s critical to understand what financial executives are experiencing when adopting value-based mechanisms and/or running the business in a value-based environment,” says Roy Beveridge, MD, Humana’s chief medical officer and a Managed Healthcare Executive editorial advisor. “These insights are important—not only to health plans, but to all those involved in the healthcare ecosystem—to better understand where we, as an industry, need to move the puck to support future decision making as this transition from fee-for-service continues. Looking at the results, we can better understand the current state, gaps, and overall perspective from the financial executive’s lens.”

    The American Academy of Family Physicians recently conducted a similar study, sponsored by Humana, on value-based payment readiness from the physician perspective. This study 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 ROI has improved since the original study was conducted in 2015.

    “Having these two unique perspectives is important,” says Beveridge. “And there are similar themes especially around transparent information from health plans and exchanging/interpreting data, i.e., interoperability.”

    The study found that overall, interoperability requires acceleration. Beyond that, says Beveridge, “I think it’s encouraging that more physicians are receiving incentive payments based on achieving quality/clinical measures.”

    When survey respondents were asked, “Does your organization incentivize physicians (in addition to annual salary) based on quality outcomes and/or performance with patients?” over half, 59%, said “yes.”  

    Transitioning into value-based payment arrangements requires making changes in the office and may ask more of the physician, according to Beveridge. “While we have seen positive results from our Humana contracted value-based physicians, from both a quality and cost perspective, we also see the work physicians and clinicians must make during that transition to value.  Allowing more of the healthcare dollar to reach the physicians’ hands enables them to do what they were trained to do: providing quality care to their patients.”

    Another interesting, and important, finding from the study that almost three-quarters of healthcare executives (74%) report their organizations have achieved positive financial results from value-based payment programs to date. 

    This is notably higher than the 51% of healthcare executives reporting positive financial results in 2015.  “If the care organization cannot see a return on all the work and investments they’re making, or simply put, keep the lights on and staff employed, value-based payment models are not going to be sustainable,” Beveridge says. “The care organization must see the fruits of their labor and be in a position where they can reinvest to enhance their capabilities, keep their staff happy, and continue to thrive in the business.” 

    While many of the same barriers exist from 2015, Beveridge is encouraged that value-based payment adoption has doubled, 12% to 24%, the past two years, and almost three quarters of healthcare executives are reporting positive ROI. This is especially encouraging given that many organizations had and/or are making substantial investment in their infrastructure and technology during their transition to value, he says.

    Based on the study, Beveridge has three takeaways for healthcare executives:

    1. Remain optimistic about the growth of value-based programs, as there’s been growth in this area compared to 2015.
    2.  Investment in interoperability is paying off, “improving the exchange and access to their patients’ data inside their system,” Beveridge says. “We as an industry need to work together to solve the external interoperability issue. Executives can’t fix external interoperability alone. The industry must come together, including care providers, health plans and EHR/IT vendors, to determine steps we can continue to take to solve this dilemma.”
    3. Value-based payment programs are yielding positive financial results. In the study, almost three quarters of the executives who participated reported positive results. In 2015, half of executives reported a positive ROI. “With more experiencing a positive return on their investments over the past two years, we can assume more executives are better understanding the processes and infrastructure needed to truly be successful in value-based models,” Beveridge says.



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