Set the Data Free

October 1, 2019

A new survey suggests that healthcare organizations are missing the vital claims data they need to fully embrace risk-based payment arrangements.

When the healthcare industry first started discussing moving away from fee-for-service reimbursement models to value-based care, many provider organizations balked. They were especially wary of two-sided risk models, where providers can share in savings when their patient populations are healthier, yet are also partially financially responsible when healthcare spend is above certain benchmarks, says Joe Damore, FACHE, senior vice president of strategy, innovation, and population health at Premier, Inc., a healthcare improvement consulting firm.

“Even as little as a year ago, I heard a lot of folks from health systems saying, ‘How can I avoid risk-based payment arrangements?’ Or, if not that, at least, ‘How can I slow this down?’” he says. “But today, we’re hearing the opposite. Medicare is driving this, and healthcare organizations recognize it’s going to happen whether they want it to or not. The question is really whether or not they are ready for them.”

Recent reports from CMS suggest that there is value in risk-based payment arrangements including accountable care organizations (ACOs). In 2017, the agency reported that more than $1 billion was saved, all while improving the quality of care. Yet, despite those improvements, participation in such arrangements is decreasing. To try to better gauge why that might be-as well as assess overall readiness for two-sided risk models-Premier, Inc., decided to field a survey across U.S. hospitals and health systems.

The vast majority of the 177 survey respondents indicated that less than 20% of their population was covered in a risk-based arrangement, yet 27% stated they expected to have more than half of their population in risk-based arrangements within the next 5 years. Yet, only 5% of those respondents expect to have more than 80% of their population in risk-based arrangements in that same time frame. It’s clear that these organizations don’t feel ready to proceed.

The survey data also suggests progress toward more two-sided risk-based contracts will remain slow for the time being.  When asked about the most significant barriers to risk-based models in the Medicare fee-for-service program, survey respondents stated reimbursement, timeliness of claims files, and competing or higher change priorities topped the list. But when asked about the biggest barrier to moving toward more risk-based payment models in general, Damore said he saw the lack of timely and accurate claims data as standing out as the greatest barrier.

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“These health systems just can’t get the data they need from the commercial and Medicare Advantage side,” says Damore. “You cannot manage a population and be at risk without that claims data. And as we saw in the survey, 96% of the organizations that participated are not getting timely and accurate data and a good number of them aren’t getting any data at all.”

While the survey report makes the suggestion that Congress could enact new policies to speed the transition to risk-based payment models, Damore adds that payer organizations could also do more without a government push.

“We have a lot of payer organizations, both national and regional plans, that are still not sharing the data that healthcare organizations need. It’s hard to see why. There’s no barrier to doing it-they just see that data as a business asset and are reluctant to share,” he says. “But we see when that data is shared, what is possible. Medicare’s ACOs have done a really good job at sharing their data. They are sending over claims data every month and, after eight years, it’s fairly clean. That’s been a big help and that’s why they have the kind of improvements they do.”

Until such changes happen, Damore says that healthcare organizations may be at a disadvantage to when it comes to two-sided risk-based models of payment. And finding novel ways to facilitate adoption is something that the industry, as a whole, should be carefully investigating.

“What we hope is that Congress will be key in making some of these improvements,” he says. “If you look at the survey results, almost 30% of organizations are now in a Medicare ACO system. They are clearly the leader in risk arrangements-and that’s because they can offer that accurate, timely data. If the government can do something that requires commercial and Medicare Advantage plans to do the same, there’s a better chance that care delivery systems can better manage care to the patient in a way that makes sense.”

Kayt Sukel is a science and health writer based outside Houston.