Smaller providers may struggle to deliver value-based care

Hospital entance
Smaller hospitals and health systems may face higher financial risk in the transition to value-based care. (Getty/monkeybusinessimages)

Though the transition to value-based care is being emphasized across the healthcare industry, smaller hospitals and health systems may have trouble implementing required changes, according to a new survey.

Ernst & Young Advisory Health surveyed (PDF) 700 healthcare professionals, including executives, at providers with a revenue of $100 million or more. Of those with the lowest revenues (between $100 million and $499 million), 67% said no value-based reimbursement initiatives were planned for 2017. Twenty-seven percent were going to use some type of alternative payment model; just 7% were deploying bundled payments.

Smaller hospital systems often lag behind their larger counterparts in making the transition, so embracing value-based care can put them at greater financial risk, according to the report.

“The new world order in healthcare will require clinical, administrative and financial innovation to meet the needs of consumerism and industry demands for value transparency,” Yele Aluko, M.D., an executive director at EY Advisory Health and one of the report’s authors, said in an announcement. “Many smaller hospitals and health systems lack the strategic management processes, corporate resources and capabilities to remain competitive in the short term or relevant in the long term.”

RELATED: 3 traits of good value-based payment programs

Though value-based care may pose a greater challenge to smaller providers, the survey identified four major hurdles for all organizations looking to implement value-based programs:

  1. Healthcare costs are continuing to skyrocket.
  2. Challenges in the clinical workforce, such as burnout, could expose more patients to medical errors.
  3. Clinical quality measures aren't standardized.
  4. Providers, payers and regulators don’t trust each other.

To accelerate the transition away from a fee-for-service model, EY recommends that value-based care be expanded from payment to “value-driven care” that encompasses patient satisfaction, employee engagement and satisfaction and technological innovation. Improvement in these areas can reduce costs and improve care quality in tandem with payment models that reinforce high-quality care.