Value-based payments essential in evolving healthcare industry, experts say

Leaders in the healthcare industry say the payment system must evolve and adapt to the changing market, providing reimbursements that best support population health improvement efforts, as hospitals struggle to financially support new initiatives dealing with wellness programs, preventive care and public health initiatives, according to Becker's Hospital Review.

Insurance companies reimburse doctors at the Cleveland Clinic in Ohio for little other than patient visits, with no compensation for e-mail or phone consultations. The policy helps monitor a patient's health while cutting costs and streamlining care, and physicians should receive compensation for their time and care, Michael Rothberg, M.D., vice chair for research at the Cleveland Clinic Medicine Institute told Becker's

"There are additional things that I might be able to do to better manage your health, by having a nutritionist or having a health coach or having a pharmacist see you," he says. "All of those things would be less expensive than your coming to see me. But for me to have a pharmacist in my practice who goes over your medications and the side effects and interactions, there's no way for me to bill for that."

Volume-based payments are holding the system back, experts say, and there is a desperate need to transition to one that will give hospitals and providers incentives to join the pay-for-performance model, reimbursing physicians based on quality, patient safety and outcomes, according to the article.

Slowly but surely, the industry is beginning to experience a shift.The Affordable Care Act started the Hospital Value-Based Purchasing program, which allows for the Centers for Medicare & Medicaid Services (CMS)  to hold back 1.25 percent of Medicare reimbursements at hospitals paid under Medicare's inpatient prospective payment program. By the end of fiscal 2014, CMS will disburse $1.1 billion to hospitals based on quality measures and patient satisfaction, the article states.

However, Rothberg told Becker's that it's essential that the industry structure the plans correctly, with either the health system getting a single payment for all of a patient's healthcare during a given time period, or primary care physicians receiving enhanced payments and some shared savings for the patient's overall costs. The latter would require a flat fee to cover service costs that providers currently don't get paid for, according to the article.

Until change is implemented across the board, experts say providers should continue to push forward with population health initiatives, as well as take a proactive approach and seek out payers that are open to value-based contracts. 

According to a biennial survey released in December, Governing the Value Journey: A Profile of Structure, Culture, and Practices of Boards in Transition, which examined how four different types of healthcare boards--health systems, independent hospitals, subsidiary hospitals and government-sponsored hospitals--conduct business and view their performance, organizations are planning for value-based payments and population health management in 2014, FierceHealthcare previously reported.

To learn more:
- here's the Becker's article