Study: Payers slowly migrating toward value-based reimbursement

Stack of health insurance application forms with stethoscope on top
Not all payers are ready to take a leap into the world of value-based reimbursement. (Getty/vinnstock)

While CMS has embraced value-based reimbursement, the country’s health insurance companies are still far from widespread adoption, according to a new survey.

The HealthEdge Voice of the Market survey revealed (PDF) that different payers and their affiliates will reach value-based care at different times, as clear discrepancies exist among adoption rates. About half (46.4%) of the 150 executives surveyed said that between 50% and 75% of their current contracts are in value-based models, with about the same number reporting similar adoption with in the next two years.

And according to survey results, health insurers and providers will need to trust and work together in order to ensure the future success of these programs. More than 50% of those surveyed said that provider and member engagement are the key barriers to success.

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"For value-based reimbursement to truly take hold, insurers and providers must resolve to align goals and break down some of the long-standing barriers that have stood in the way of collaboration," Harry Merkin, vice president of marketing at HealthEdge, told FierceHealthcare. "Insurers must be willing to not only share both upside and downside risk with providers, they must be able to share critical metrics on quality and performance with their provider partners." 

"Providers must be ready to manage the health of their patients proactively, earning incentives for keeping them healthy, rather than simply being paid for services rendered," Merkin added. "These represent significant shifts for both insurers and providers and will take both commitment and time for transformation."

RELATED: Humana, Aledade team up to expand value-based care

The joint study with Survata also revealed that the respondents place almost equal weight on all value-based strategies, with no one coming out as a clear winner. When asked which models are the most successful, 31.1% said patient-centered medical homes, 28.5% said accountable care organizations, 23.2% backed bundled payments and 17.2% said episode-of-care programs.

CEO Steve Krupa also stressed in a statement that payers will need to leverage modern technology in order to support the administration of these valued arrangements. About 40% of the survey respondents said technological concerns posed a major challenge.

Not to mention, many health insurers are not ready to rock the status quo on existing margins.

Still, respondents are confident that value-based reimbursement will grow over the next two years if given the right resources required to execute them at scale. Some states, such as California, have largely migrated to a value-based model, while the Northeast has been more resistant. 

"When insurers and providers work together for common goals and results, including data sharing and frequent communications on how programs are performing, the rewards clearly outweigh the risks," Merkin said. "The survey showed that no one model has yet emerged as the clear leader, or silver bullet, at this time, which resulted in modest predictions for the growth of value-based programs. Once some of the noted successes are more broadly adopted, the benefits of value-based reimbursement will become that much clearer."

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