The Department of Health and Human Services in March announced that 30 percent of Medicare payments are now tied to alternative payment models that “reward the quality of care over quantity of services provided to beneficiaries.” That’s up from 20 percent in 2014, but still a far cry from the 85 percent goal that HHS Secretary Sylvia Burwell is eyeing by the end of the year.
Burwell isn’t alone in pushing for a radical transformation in the way we pay for — and ultimately deliver — care. With passage of the Medicare Access and CHIP Reauthorization Act of 2015, Congress put a major stake in the ground, devising new payment methodologies for physicians by replacing the outdated physician fee schedule with financial incentives that are tied to risk-bearing, coordinated care models.
Pressure is also mounting from the private sector. The Health Care Transformation Task Force, a consortium of providers, payers and consumers, earlier this year reported that 41 percent of provider and payer members were engaged in value-based contracts in 2015, up from 30 percent in 2014. Task force members have committed to shifting 75 percent of their business to contracts that reward value and outcomes by 2020.
These are all heady goals and put us on a trajectory to create a more coordinated delivery system that aims to put patients at the center. As we continue this transformation, providers are becoming keenly aware of what it will take to alter their business models in order to be successful in a “value-based” environment. As a result, they are also becoming more cautious in their approaches — 45 percent of providers recently surveyed by KLAS projected that it will take 3 to 5 years for population health management to surpass fee for service as the predominant form of reimbursement; 28 percent said it would take six or more years.
Optimizing the use of health information technology will be central to surviving in this new environment. Providers need to build information systems that provide a more complete picture of their patient populations and enable them to understand new cost structures. Not surprisingly, risk analytics and care management tools are cited by providers as being the most useful — 74 percent and 62 percent respectively — and the systems that they are most likely to spend capital on in the future — 61 percent and 59 percent respectively — according to the KLAS study, “Value-Based Care 2016: The Transition from Fee for Service.”
It is vital that providers understand how alternative payment models and population health management will impact their bottom line. Having the right IT systems in place will give them a more granular look at how resources are being allocated and what adjustments have to be made in order to assume more financial risk.
We also know that to be successful in this new world order, providers must be able to exchange data effectively and efficiently. Unfortunately, we still have some significant barriers to overcome before interoperability and information exchange can become universal, both of which are essential to improving patient care by ensuring the free flow of data between clinicians. In a 2015 study conducted by KLAS and CHIME, providers and vendors identified the lack of cohesive standards and a national patient identifier as two of the biggest barriers to advancing the interoperability of electronic medical record systems.
In order to truly advance value-based care and move us closer to the Triple Aim, we must tackle, once and for all, the problem that providers face in exchanging patient information. Setting data standards and finally addressing the problem of patient identification are two critical starting points.
The industry has made great strides in adopting the building blocks for information exchange through the Meaningful Use program, but if we are going to truly live up the promise of that program, and advance value-based care, we need to become more proactive in addressing interoperability. Patients must trust that their records will be at the right place at the right time.