Value-Based Reimbursements Hit 53% in 2017, Reform Slows

Update 1/7/2020: This article was updated to reflect that half of the reimbursements in the commercial sector made in 2017 were value-based. Previously, the first line of the article stated that half of commercial payers were involved in value-based care.

Although nearly half of the commercial sector reimbursements in 2017 were value-based reimbursements, the growth in payment reform is stagnating, the Catalyst for Payment Reform (CPR) Scorecard indicated.

“Not all payment reforms are equally effective and it’s time to put our energy toward payment methods that don’t rely on fee for service but, instead, empower health care providers to manage our populations and assume financial risk for their performance,” said Robert S. Galvin, MD, chief executive officer of Equity Healthcare and chair of the CPR board.

CPR has released a scorecard in 2012, 2013, 2016, and 2017.

During the first couple of years of the scorecard, payment reform was strong. In 2012, 10.9 percent of payment channeled through a value-based reimbursement system and 2013 saw that percentage nearly triple (27.1 percent). By 2016, 48.5 percent of payments were coming to providers through a value-based reimbursement arrangement.

CPR also assessed how many patients were receiving care that resulted in value-based reimbursement. The percentage of patient population in value-based care in 2016 was over ten times the percentage in 2012, rising from 2 percent to 24 percent over the four-year span.

However, in 2016 and 2017 payment reform decelerated, with less than five percent growth. Furthermore, 90 percent of value-based reimbursements in 2017 were still grounded in fee-for-service models.

And there has been little change in the prevalence of providers taking on downside risk in value-based arrangements, with only 6 percent of respondents saying they engaged in downside risk in 2017.

The scorecard’s previous five years saw a shift from pay-for-performance to shared savings payment arrangements, with shared savings payment arrangements as a percent of the total payment to providers rising six percentage points from 2016 to 2017 alone.

Meanwhile, participation in bundled payments was steady and only saw a 0.4 percent difference in the first and last studies, rising from 1.6 percent in 2012 to 2.0 percent in 2017.

The scorecard looked at affordability and quality of care to assess the country’s progress since 2013, particularly in relation to payment reform.

Researchers found that costs of care has continued to be an access barrier and, in fact, the effects may have impacted more patients as time progressed.

The 2013 scorecard noted that 7.45 percent of commercially-insured patients cited affordability as a barrier to care. In 2016, that percentage rose by two percentage points (9.48 percent) and in 2017 it kept rising (9.68 percent).

Although affordability barriers are more prevalent, so are plans’ efforts to ensure patients are not caught off guard by surprise bills. The results show a two percent increase in payers offering or supporting a cost calculator between 2013 and 2018. All scorecard participants in the 2017 survey who answered the cost calculator question offered a cost calculator.

However, nearly eight percent less said that their calculator incorporated member design benefits such as copay and cost-sharing.

“Given the growing recognition that high prices are the major reason health care costs continue to rise while the use of services remains flat, CPR’s view now is that it’s not real payment reform if it doesn’t address prices,” said Suzanne Delbanco, PhD, executive director of CPR.

In order to gauge care quality, the scorecard looked at specific treatments as well as general practices. Results were mixed.

To observe the development of chronic disease management in an increasingly value-based reimbursement system, researchers focused on a couple of metrics related to diabetes treatment.

The researchers found that a patient with diabetes was more likely to get an HbA1c test in 2012 than in 2017, with 88.7 percent getting the blood sugar measurement in 2012 and 87 percent in 2017. Nonetheless, there was a five percent increase in the number of commercially insured patients with diabetes who did not have well-managed blood sugar levels over the same time period.

The number of patients who receive home recovery direction from their provider went up by two percentage points between 2012 and 2017. At the same time, however, the number of patients in inpatient settings who acquired pressure ulcers increased over those five years and hospital readmissions did not change. Just as in 2012,  around 8 percent of patients are readmitted to the hospital within 30 days of initial discharge during the 2017 study period.

Two percent more providers advised parents to get their children vaccinated in 2012 than in 2017. But when it came to delivering children, the number of providers that opted for a cesarean section during low-risk deliveries was the same between 2012 and 2017.

The shifts are slight and it is impossible to assess whether these changes were solely related to payment reform or influenced by other factors. But, together, they paint a picture of a stagnating value-based care system which the researchers found disheartening.

“The results of these analyses are disappointing and a wake-up call that we are moving too slowly and essentially missing the mark,” said Galvin.

The Scorecard 2.0 used data from one of the nation’s largest health payer surveys, the eValue8 survey conducted by National Alliance of Healthcare Purchaser Coalitions. In 2018, the survey covered 46 health plans who collectively insure half of the commercially insured population in the US. However, the survey is voluntary and plans did not need to respond to every question.

Elements of the study that could impact the results include the fact that HMOs were included and that most of the respondent plans appear to be large. Also, not all participants responded to every question. Furthermore, there may be self-selected bias in that potentially plans that engaged in payment reform last year were more inclined to participate.

Other limitations include overrepresentation of certain markets regarding geography and demographic, lack of verification on self-reported information, and data collection challenges and differences across health plans.

Outside of commercial payers, in Medicaid most states are engaging in value-based care and payment reform continues to move forward.

Like the private sector, however, states struggle to convince providers to take on more downside risk.