Years into the transition to risk-based payment models, only a handful of provider organizations participate in downside risk only, and even fewer are successful. Advisory Board surveyed 225 providers and 26 health plan executives from across the country on their willingness and preparedness for delegating risk to providers in value-based contracts. Read on for the three biggest takeaways on what plans and providers still disagree on when it comes to value-based payment (VBP).

1. Providers are still split on if Covid-19 will slow down or speed up risk adoption.

The Covid-19 pandemic has once again placed a spotlight on value-based payments. Many news headlines suggest providers are more interested in VBP now because they desire a more stable financial model than they experienced during the pandemic. More plan executives think Covid-19 will slow down the pace of risk adoption rather than speed it up because the pandemic has left so many providers cash-strapped and moving to risk requires a hefty financial investment.

On the other hand, providers are evenly split on how they think Covid-19 will impact risk adoption. A quarter of providers say Covid-19 has caused them to take on less risk, and a quarter of them say Covid-19 has caused them to take on more risk. The future is not set in stone, and whether providers take on more risk depends on the support that plans and other stakeholders can provide right now.

Plans and providers views on increasing risk adoption across the next few years

2. Providers in upside risk tout their experience managing risk with other payers, but plans care more about previous investments in total cost of care infrastructure.

When providers in upside risk are at the negotiating table for a new risk-based contract, the number one trait they tout is their experience managing risk with other payers. But when health plans come to the same table, they are looking for partners with previous investments in total cost of care infrastructure. This disconnect shows that plans may be discounting providers who don’t appear ready for downside risk, but those providers just need guidance on what sets them up for success in downside risk.

What plans look for vs. what providers highlight when negotiating a new risk-based

3. Providers think they earn 10 percentage points less than plans say they can in a value-based payment model.

Plans say that the average potential reimbursement increase in an upside risk arrangement is 11% to 15%. Providers see it differently. They claim that they can increase their revenue under upside only risk by just 6% to 10%. And when asked about actual bonus increases, providers report a mere 1% to 5% boost. This means plans are overpromising and underdelivering when it comes to upside risk models, which makes providers less likely to enter downside risk. It doesn’t matter who is truly right here—perception is often what matters, and plans need to be more transparent to set expectations appropriately.

How much plans and providers think providers can earn in upside risk

Plans and providers must overcome these differences and communicate with each other more clearly if we want to move further in the path to risk together. For more findings from our survey, check out our infographic on the three things providers in downside risk know that other providers don’t. For more findings from our survey, check out our infographic on the three ways to help providers reel in success in downside risk.