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New Market Survey Findings Reveal Opportunities and Barriers to Adopting Value-based Payment Models
[March 10, 2020]

New Market Survey Findings Reveal Opportunities and Barriers to Adopting Value-based Payment Models

ALBANY, N.Y., March 10, 2020 /PRNewswire/ -- The value-based care movement has expanded in recent years and the adoption of value-based payment models has shown signs of accelerating. However, organizations still face critical challenges when entering VBP arrangements. Hurdles include balancing fee-for-service and fee-for-value mindsets, the amount of investment necessary to effectively participate and the ability to ensure adequate volume to protect against risk.

DataGen, a leading healthcare data analytics and policy firm, has released new market survey findings that explore how healthcare organizations are planning for and navigating these challenges. Based on a survey of 102 healthcare executives,* the data reveal insight into how these leaders view the current state and future of VBC.

Access the full market report here and for a deep dive into the data, join DataGen for an interactive webinar on Thursday, March 19, at 1 p.m. eastern for a discussion and analysis of the findings. Expert panelists from across the industry will examine the current state of VBC and what lies ahead. Registration is now open.

Key findings include:

A quarter of organizations' revenue is tied to VBP; ACOs are the most popular VBP model

  • On average, respondents said 25% of their organizations' revenue is tied to value-based payments. Those with 550 or more beds reported the largest portion of risk, with an average of 37.9% of revenue tied to VBP.
  • Accountable care organizations are the most popular type of value-based arrangement respondents participate in (62%) followed closely by Medicare episode-specific bundled payment models (51%), patient-centered medical homes (35%), capitation (29%), commercial bundled payments arrangements (25%), and all-payer/other-payer options (11%).

Healthcre leaders are optimistic about the future of VBP

  • Nearly two-thirds (62%) of respondents plan to enter into or expand VBP participation in the next two years; 9% say they will not; 29% are undecided.
  • When asked which VBC models respondents plan to enter or expand into in the next two years, commercial bundled payment arrangements (32%) and ACOs (32%) tied as the top response, followed by Bundled Payments for Care Improvement Advanced (23%) and capitation (20%).
  • Half of respondents (50%) believe VBP will become the primary revenue model for the U.S. in the next five years. A third (33%) say it will not; 17% are undecided.

Quality is improving – but if financials don't keep up, sustainability will be a challenge

  • Sixty-nine percent say value-based payment programs have resulted in quality improving significantly or moderately, 29% say it has only improved slightly or is about the same and no respondents said quality declined.
  • However, less than half (45%) say financials have improved significantly or moderately, while 51% say they improved slightly or stayed about the same. Two percent reported a decline.

The biggest hurdle is the bottom line

  • Acceleration into new payment models is the No. 1 reason why organizations will invest in value-based models. Meanwhile, budget is the No. 1 reason why organizations will not invest.
  • When asked about their strategic priorities for the year, almost three-quarters of respondents (73%) ranked focusing on efficiency and reducing costs within their top three priorities. Meanwhile, less than a third are prioritizing participation in VBC/alternative payment models (31%), managing population health (32%) and improving patient safety (30%).

Investment in analytics, technology, and care coordination

  • Respondents said they strongly favored predictive and real-time analytics (80%) over traditional analytics (41%) or industry data, such as regulatory intel or benchmarking data (54%).
  • Nearly 60% of respondents intend to invest in new technologies in the short term. For those who plan to invest, the top choices are performance reporting dashboards (76%) followed by decision support and workflow technology (69%).
  • A third of respondents (33%) are not sure if they plan to expand or invest in care coordination in the next two years. Forty-five percent say they definitively will, and 22% say they will not.

"VBC models have been gaining ground over the past five years, despite how deeply the fee-for-service mindset and model are entrenched," said Mike Ilnicki, DataGen's president. "Not surprisingly, our respondents cited better incentives and mandatory participation as the top factors that would help drive higher participation and investment in VBP models. Healthcare organizations are feeling pinched financially as margins continue to shrink. Expanding and entering into VBP models will require significant data analysis, planning, and a keen understanding of VBP opportunities as healthcare organizations look to succeed in the future."

Commissioned by DataGen, the survey of 102 healthcare executives was conducted in September 2019 by Sage Growth Partners, a healthcare research, strategy and marketing firm. Respondent titles included chief financial officer (34%), chief medical officer (22%), chief operating officer (20%), chief nursing officer (15%), vice president of medical affairs (6%) and chief medical information officer (3%). Organization types spanned hospitals (53%), single/multi-specialty physician groups (29%), and health systems (18%). Respondents represented 38 states with an average of 2.7 respondents per state.

About DataGen
For more than a decade, DataGen has been an essential partner to healthcare organizations across the country, illustrating the financial implications of payment policy changes and promoting a pragmatic view of how changes will affect revenue and profitability. DataGen provides data analytic support to hospitals, health systems, state hospital associations and other healthcare groups across the nation as they strive to improve quality, outcomes and financial performance. Drawing on specialized health policy and payment expertise, as well as in-depth understanding of the power of analytics to drive change, DataGen simplifies the complexities of healthcare payment change.

Media Contact
Vanessa Ulrich
(410) 534-1161

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