More U.S. healthcare payments are tied to alternative payment models

The report finds that 29% of healthcare spending is tied to alternative payment models, such as shared savings, shared risk, bundled payments or population-based payments.

Nearly a third of total U.S. healthcare payments were tied to alternative payment models (APMs) in 2016, according to a new report.

The report, issued by the Health Care Payment Learning & Action Network (LAN), a public-private partnership launched in March 2015 by the U.S. Department of Health and Human Services to drive adoption and alignment of APMs, found that 29% of payments, or $354.5 billion, were tied to APMs, a six-percentage-point increase from 2015 to 2016.

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The results are in line with the goals of LAN to tie 30% of total healthcare payments to APMs by 2016 and 50% by 2018, the partnership announced.

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The report is based on data on actual 2016 healthcare spending from LAN, America’s Health Insurance Plans, The Blue Cross Blue Shield Association, and the Centers for Medicare & Medicaid Services across commercial, Medicaid, Medicare Advantage and fee-for-service Medicare market segments. The survey collected data from more than 80 participants and accounts for nearly 245.4 million people, or 84% of the covered U.S. population, LAN said.

The findings show that:

  • 43% of healthcare dollars are tied to fee-for-service or other payments not linked to quality or value.
  • 28% of healthcare dollars are tied to pay-for-performance or care coordination fees.
  • 29% of healthcare spending is tied to APMs, such as shared savings, shared risk, bundled payments or population-based payments.

“We are encouraged by these results and the great progress being made toward APM adoption,” said Trent Haywood, M.D., chief medical officer at the Blue Cross and Blue Shield Association, in the announcement. “These findings underscore the importance of the public and private sectors working in concert supporting providers towards APM adoption. We know that providers need information and support from health plans to take on risk. This Measurement Effort helps develop the rationale for continued payment reform, and we as health plans must continue to share information, clinical support and data on spending and quality to determine to encourage further progress.”

Next year LAN will incorporate recent market changes and legislation about payment reform into the framework, such as changes in payments to primary care physicians through patient-centered medical homes and the introduction of the Comprehensive Primary Care Plus Model.