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Value-Based Care News

47% of Payer, Provider Business Tied to Value-Based Care

More than a dozen large organizations have tied close to half of their business to value-based care models, says the Health Care Transformation Task Force.

Value-based care for payers and providers

Source: Thinkstock

By Jennifer Bresnick

- Value-based care is nudging the half-way mark as more and more payers and providers shift their contracts away from fee-for-service arrangements, according to the Health Care Transformation Task Force (HCTTF).

In a new report, the Task Force states that by the end of 2017, 47 percent of its 14 members’ business was tied to some sort of value-based model, representing a steady increase over time.

In 2015, just 30 percent of healthcare dollars flowed through value-based arrangements, rising to 41 percent in 2016. 

The upward trend appears encouraging for payers and providers who believe that paying for performance is the industry’s most promising strategy for controlling costs and improving outcomes.

“There is growing evidence that value-based care leads to better health, better care, and reduced total cost. That’s why our members remain focused on reaching the goal of 75 percent by 2020,” said Fran Soistman, Executive Vice President and Head of Government Services with Aetna and HCTTF Chair.

“This report demonstrates Task Force members’ commitment to accelerating the pace of transformation toward value-based care across the health care continuum.”

The HCTTF includes a number of the nation’s largest payers, including Aetna, Anthem, and several of the Blues, as well as Geisinger Health System and Kaiser Permanente, both of which offer insurance options.

Well-known providers are also participants in the Task Force, such as Cleveland Clinic, Ascension, Atrius Health, and Partners Healthcare.

The marked rise in value-based care among these large entities indicates strong commitment from industry leaders, but doesn’t offer much insight into how the nation’s smaller health systems, physician groups, and local payers are transitioning away from traditional methods of reimbursement.

An unrelated survey from the Healthcare Learning & Action Network (LAN) in October found that just 34 percent of all payments made in 2017 moved through truly value-based models, such as shared risk or shared savings.

LAN polled 61 health plans and a handful of state Medicaid and Medicare associations to compile its results.

While the number is lower when more perspectives are taken into account, LAN also found a steady uptick in value-based reimbursement adoption over time. 

The group also noted that even 34 percent of the payer market equates to 77 percent of the covered American population, or approximately 226 million people.

Both surveys paint an optimistic picture of how value-based care is overtaking fee-for-service as the dominant method of reimbursement.

The LAN has set a goal of tying 50 percent of payment to value-based models in 2018 by its metrics, while the HCTTF is shooting for 75 percent by the end of 2020.

Based on the trajectory of adoption, both goals do appear attainable. 

However, payers and providers will need to navigate continued regulatory uncertainty and develop comprehensive strategic plans to successfully shift more of their business into these innovative payment models.

“The transition to value is a challenging journey, and much work lies ahead,” said Jeff Micklos, Executive Director of HCTTF. “While the uncertain landscape in 2017 around value-based care impacted overall performance, we’re pleased to see our members continue the forward momentum.”

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