Healthcare More Optimistic About Value-Based Payments - KPMG United States
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Healthcare Organizations See Greater Optimism About Value-Based Care: KPMG Poll

Healthcare More Optimistic About Value-Based Payments


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-- 46% see value-based contracts improving profitability versus 23% two years ago
-- Need for quality reporting data pronounced under new payment models

Healthcare organizations are much more bullish than they were two years ago about how value-based contracts – which promote quality care and emphasize efficiency of hospitals and other providers – would affect profits, according to a poll by KPMG LLP, the U.S. audit, tax and advisory firm.

“We are beginning to see performance based payment models replacing traditional fee-for-service models,” said Matt Snyder, KPMG advisory principal who focuses on internal audit and enterprise risk at healthcare organizations. “The need to shift from volume to value is shared by payers, providers, and ultimately patients.”

KPMG’s poll of 221 managers and executives during a June 5 Webcast, “Is your data ready for value-based care? Internal controls over value-based reporting” (click for replay), found that 46 percent of healthcare organizations see improved profits from value-based contracts, compared with 23 percent when the same question was asked during a webcast two years ago. About a third of respondents in this year’s webcast see value-based contracts as having a neutral impact versus one quarter in the prior survey.

A slight majority (52 percent) of respondents in the 2016 survey saw value-based contracts hurting profitability and about a third (35 percent) expected this form of reimbursement to dampen their finances when asked in 2014. In this year’s survey, only 20 percent expect lower profitability. 

Healthcare executives will have to focus on high quality, transparent and secure data reporting capabilities to succeed in this climate, Snyder said.

“It is key to generate, assemble, and share data in a reportable manner to help reap the benefits of value-based reimbursement,” Snyder said. “In addition to other reporting requirements, payers are increasingly playing the role of ‘data service platform’ to healthcare providers in order to help them manage patient care. Our clients are finding significant value in having us help them with developing standardized processes and internal controls. ”

Value-based Payments Still Minority
Healthcare care providers still largely get paid by the “fee-for-service” model that links reimbursement to activity. Only 10 percent of respondents said they had a majority of their contracts tied to value-based reimbursement, such as shared savings, bundled payments (a flat-rate for a given medical procedure), or capitation for a given patient population.

Approximately 49 percent of respondents said their contracts represented a small percentage (less than 10 percent) of their contracts.

Government spending on healthcare through Medicare, Medicaid, Veterans Administration and other programs have been shifting to value-based payment models in an attempt to improve efficiency and tie the quality of care to payment.


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Bill Borden

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