Just before the COVID-19 pandemic emerged, 48% of healthcare providers surveyed said three-quarters of their organization’s payments were grounded in fee-for-service models of care. Fast forward a year and the financial aftershocks of the pandemic have highlighted some of the benefits of value-based models for providers as well as health plans and consumers.
Despite the benefits of incentive-based payment models in healthcare, including indications that it may reduce readmissions and healthcare costs, providers and payers alike have taken a while to warm up to value-based care. Data from 2018 found the industry was only one-third of the way through the journey to value-based care. The same data indicated that approximately 5% of healthcare payments were through alternative models, with most payers anticipating minimal future growth in this area. Meanwhile, a 2018 survey showed physicians were cautious about value-based reimbursement—with nearly half believing value-based models could have a detrimental effect on the quality of patient care.
But during the pandemic, when elective procedures were postponed in the first months and volumes were slow to return to pre-COVID levels, many providers who relied on fee-for-service payment for most of their revenue found themselves negatively impacted financially by the lower utilization of services. Meanwhile, value-based models gave some providers a financial lifeline, with payers like Blue Cross and Blue Shield of North Carolina providing financial and other support to primary care providers and others speeding up value-based payments to help physician practices. These are moves that strengthened these practices’ financial stability while protecting members’ access to care. Experiences such as these prompted increased inquiries around how to make the move toward value.
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Source: Hitconsultant
