Jordan Stone and David Clain
In our last post, we promised we'd write again on results from our 2013 Accountable Payment Survey. Thanks for your responses—and for coming back for more.
As a recap, we know the number of providers with risk-based contracts has nearly doubled in the last two years. Now, we want to share how those currently on the sidelines are anticipating the move to accountable payment.
Moving beyond Medicare
One unexpected result we're seeing is a shift in the type of payer providers expect to work with.
For those that plan to enter a risk-based contract within the next five years, a considerably smaller proportion of health systems are anticipating partnerships with Medicare than they were two years ago. Meanwhile, a growing number of systems are reporting plans to engage other payers, including private insurers, managed care groups, and in some cases, self-owned health plans.
This forecasted shift from public to private payer or employer partnerships applies both to total cost of care contracts and bundled payments—but in our view, there are distinct and important reasons underlying the shift in each case.
Total cost of care: One (Medicare) program may not fit all
For total cost of care contracts, which include capitated or shared savings arrangements, we think the decline in interest in Medicare pilots—from 55% anticipating working with Medicare in 2011 to 18% in 2013—reflects the progression of the Medicare Shared Savings Program (MSSP).
CMS was formulating the final rules for MSSP around the time of our 2011 survey, at which point many providers may have been eager to participate in principle but had not yet evaluated the challenges of the program in full.
- The Advisory Board’s Payment Integrity Compass helps hospitals optimize contract revenue for increasingly complex fee-for-service contracts and craft high yield risk-based contracts. For more information about how we can help your organization, please contact Mary Evans at email@example.com.
Growing through commercial bundles
The shift among providers anticipating bundled payments is even more striking. Two thirds of providers in 2011 expected to take episodic risk with Medicare within five years; that number has since dropped to under 40% for 2013 respondents. Meanwhile, the projected interest in commercial arrangements has spiked from 56% in 2011 to 69% in 2013.
There are two likely reasons for the change in tune. As with MSSP, the progression of the Bundled Payments for Care Improvement (BPCI) initiative from attractive in principle to challenging in practice—especially given the change in the program’s design in 2012—likely diminished the desire to bundle with Medicare over the next several years.
Also, independent of BPCI, nearly two thirds of providers planning to participate in bundled payment arrangements reported volume growth as their top strategic reason for pursuing episodic payments, and Medicare alone is unlikely to drive new volumes.
Indeed, this shift extends beyond Medicare for bundled. Interest in bundling with commercial insurers and directly with employers has increased (by 13% in each case), but anticipated bundles for providers’ own employee populations—which, as with Medicare, will likely not drive new volumes—has declined by half.
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