A recent report by the PricewaterhouseCoopers’s Health Research Institute states the transition from fee-for-service to value-based compensation will take longer than the committed schedule declared in January by Sylvia Burwell, the Health and Human Services Secretary.
Burwell declared a deadline of 2018 for having 50% of Medicare Payments tied to value-and-threat-based compensation models and of having 90% of payments connected to quality improvement.
“That is the target,” claimed David Harris, a member with the Healthcare Industries Advisory practice of PricewaterhouseCooper in the city of New York. “Our research is going to consume much time. Healthcare is such a complicated organization, alterations take longer”.
The 3 years provided for the value-based alterations is not so much a target time, as an aim, he said.
He said, “How many times did ICD-10 get pushed back? This wave of alteration/change around the alternative payment is going to consume time. It is not going to happen instantly. We are merely getting our feet wet.”
To get prepared, contributors need to have their EHR (Electronic Health Records) in place, and then deploy their sights on cost accounting, Harris asserted.
The insurers have the convenient time when it comes to costing, he said. Payers are always aware of the fact that what they are paying, in comparison to contributors, who do not always know what services/facilities costs.
For payers, the problem is finding their new character in altering healthcare landscape, in accordance to Harris. New models such as ACO (Accountable Care Organization) have contributors, government and the employers tolerating more of the risk.
“The issue for the insurer industry,” he stated, “is, how do I sustain relevant?”
Purchasers, notably federal government and employers, have possibly the best leverage in moving healthcare industries toward a real value-based network, Harris claimed.
Costumers will also become more knowledgeable about cost in a period of increasing deductibles, and they should hope increased engagement from their healthcare contributors.
“That copay part will drive change instantly,” Harris stated. “That is not going to go away anytime soon.”
Contributors that will make the most development towards value-based compensation are in urban places that have a great penetration of Medicare Advantage policies, the PwC study indicates. This is because the alternative payment models gather around what already works.
Now the ICD-10 has been applied, and the Centers for Medicare and Medicaid have decided the rules for meaningful use for EHR, all contributors can start to switch their attention to value-based care in earnest, in accordance to Harris.
The PwC report stated that health networks may be reluctant to walk away from healthy income streams. Presently, 53% of physician income is deployed on fee-for-service payments, which alternative models such as bundles, capitation and other incentive-based plans making up a much lower percentage.
In the bundled payments, there is 1 bill to cover all the services from various sections that do not usually communicate that data, like rehab and anesthesiology.
“How do you acquire a fixed cost when you do not have all of the information?” he inquired.
The Centers for Medicare and Medicaid mandated this year bundled payment with knee and hip replacements and programs to place a similar model around chronic aliment management next.
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