Healthcare News & Insights

Value-based payments: Are hospitals on track to meet goals?

The Centers for Medicare & Medicaid Services (CMS) wants to distribute 50% of Medicare reimbursement to hospitals and healthcare providers through alternative payment models by 2018. Are hospitals on track to meet this goal? The results of a new survey indicate facilities are having limited success with value-based care. 

GettyImages-78606064Health Catalyst, a company that focuses on effective data analytics for healthcare organizations, surveyed healthcare executives at close to 200 hospitals about how prepared they are for the shift to value-based reimbursement, where they’ll have to assume a certain level of financial risk depending on patients’ health outcomes. The results were detailed in a news release.

According to the survey, just 23% of hospitals are on target to have half their payments distributed based on their participation in value-based arrangements – but not until 2019, a year after CMS’ initial goal. Currently, 62% of hospitals receive only 10% or less of their reimbursement from alternative payment models such as accountable care organizations and bundled payment programs.

Hospitals with fewer than 200 beds are the least likely to participate in any value-based arrangements. Most small facilities reported they had no risk-based contracts at all.

However, regardless of size, most hospitals expect to be involved in some sort of alternative payment model by 2019. All but 1% of responding executives said their hospital will be participating in a value-based payment arrangement in the next three years.

But 68% said they expect these arrangements to account for less than half of the care they provide during that time period, and an additional 8% said they couldn’t predict the answer – far short of CMS’ 50% objective for all hospitals.

Requirements for success

The survey also asked healthcare executives about the tools they’ll need in their organizations to succeed with value-based reimbursement. The majority (52%) said data analytics will be crucial to their success when participating in risk-based contracts.

Reason: It’ll be crucial for hospitals to have the ability to look at data about their patient mix, pull out those who are at the highest risk of poor outcomes and create targeted initiatives designed to boost their health.

A hospital culture focused on quality improvement came in at a distant second – 24% of executives said this would be the most critical feature of a successful value-based reimbursement initiative. This data lends some credibility to the view that a hospital’s safety culture may not have as much bearing on patient outcomes as commonly thought.

Next steps for hospitals

Judging from the results of this survey, most facilities know what they need to do to effectively provide value-based care. But for whatever reason, be it budget-related or a lack of other essential resources, they’re struggling to put these ideas into practice.

While working to improve quality is part of thriving in the current healthcare environment, the best results come from targeted programs designed to improve specific aspects of your hospital’s care delivery.

Numerous initiatives show that taking steps to reduce one type of infection or lower readmissions for patients with a particular condition seems to give facilities the most bang for their buck as they begin navigating through the world of value-based reimbursement.

This is where data analytics comes in handy. Hospitals need to start taking a look at the types of patients who are admitted with the conditions CMS has its eye on (such as heart attacks) and determining which ones are at the highest risk of readmissions or complications. Then they can create programs to focus on improving these patients’ health first, applying the lessons they’ve learned to patients with other illnesses.

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