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Risk-sharing arrangements expected to be most effective over the next three years

8th Annual Industry Pulse survey finds key insights into the state of healthcare.

There are numerous game-changing concepts that have emerged in healthcare over the past few years – the progression of value-based reimbursement, the growth and change in the individual payer market, and the role that technology plays in healthcare transformation, to name a few. Where the industry is along this vast continuum of change continues to be a topic for robust discussion.  

To learn how payers' perceptions of the marketplace are evolving, Change Healthcare recently joined HealthCare Executive Group (HCEG) in sponsoring the
8th Annual Industry Pulse report, an online survey that delved into several megatrends. Among the key findings, a transition is under way from negative to positive incentives used to influence consumer behavior, and it is occurring faster than most expect. Respondents are also taking aggressive steps to advance value-based care – think risk-sharing arrangements, for example – and crack the code to successful consumer engagement. 

Following are key topics explored in the Pulse report and takeaways based on survey responses.

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Value-based reimbursement

Whenever the topic of healthcare change comes up, the subject of value-based reimbursement is never far behind. Many organizations are having success with new reimbursement models, while others are struggling with where to go next. Given the differences among service areas in these models, there's no "one-size-fits-all" approach. Each service area has unique attributes that need to be taken into consideration when launching a value-based reimbursement plan.

That said, certain types of models appear to be more effective than others. For example, according to the survey, risk-sharing arrangements, pay-for-performance and full capitation are the most popular plans and stand to remain so in the future. Slightly more than 45 percent of respondents currently use risk-based arrangements, such as accountable care organizations, and nearly one-quarter predict that these models will be the most effective at delivering performance-based care over the next three years. Fully 43 percent of respondents use pay-for-performance models, and 18 percent predict they will offer optimal efficacy by 2020. Full capitation is used by slightly more than one-third of respondents and is perceived by 14 percent to be a top model by 2020. Interestingly, partial capitation, a model now used by 29 percent of respondents, may fade over time, as few respondents indicate this model will be relevant in three years. 

Shrinking individual payer market

Since 2010, when the Affordable Care Act (ACA) was signed into law, the individual payer market has been on the upswing. However, that could change. Last fall, the White House implemented a 90 percent reduction in the advertising budget used to promote annual enrollment in the ACA, and spending for organizations that help consumers find a health plan was also reduced. Towards the end of the year, the individual mandate was repealed as part of the Tax Cuts and Jobs Act of 2017. Taking all these factors into consideration, it appears that the individual market might be poised to shrink. The survey backs up this supposition, with 44 percent of payers now believing this will be the case. Note that a majority - 56 percent - still expect the market to remain stable or even grow.

The impact of high-deductible health plans

There is a lot of buzz in the industry about the rising consumerism in healthcare. It has been hypothesized that the emergence and growth of high-deductible health plans (HDHPs) would push patients to start shopping around for the best price, quality and customer service combination. However, it seems that payers don't believe that HDHPs are as influential as once thought. Only 3 percent of respondents identified these plans as the best approach for converting passive patients into active healthcare consumers. In fact, these plans seem to be having the opposite effect – spurring more care avoidance than shopping.

Technology adoption

While consumers are jumping on the idea of using mobile solutions to streamline daily tasks like banking, retail purchases, airline reservations and more, the use of mobile and digital tools in healthcare has been somewhat slower. The survey suggests a possible reason: Nearly 50 percent of respondents indicate that digital health tools are not more widely embraced due to security and privacy concerns, an indication that mobile health solutions just can't be about functionality and interoperability – they have to engender trust among users. 

Mobile technology is not the only form of automation on payers' radar. Next- generation technologies such as blockchain, artificial intelligence and robotic process automation are getting attention. However, payers are more interested in seeing improvements in clinical integration, with 63 percent of respondents indicating that clinical-data integration is a leading factor supporting administrative cost efficiencies. 

Keeping a finger on the pulse

As organizations face the coming year, the abovementioned trends, along with many others, will impact how they approach clinical care and financial operations. By staying attuned to what's different and what remains the same, organizations can get a better handle on how to navigate the future. 

About the Author:

David V. Gallegos, SVP, Consulting Services, Change Healthcare Consulting