Employers and Physicians Disagree on Value-based Payment

Value-based payments was seen as a much-needed reform in the health care system and a way to ensure quality medical care at a lower cost. The payment model makes the medical providers in charge of both cost and quality of the services rendered. The better the delivery of healthcare and medical assistance, the higher the caretakers are awarded. Essentially, value-based payments mean providers are paid according to the value of their service. When the targets set by the Center for Medicare and Medicaid Services are met, the payment is made to healthcare providers. Things like caregiver to patient ratio and readmission rates influence the value-based payment.

The goal of this model is to replace the fee-for-service model so that organizations can be held accountable for quality and costs. Previously, the expenses were increasing while the quality of healthcare was not. It was expected that this would transform how healthcare is provided. However, the model is not too popular with physicians and health care providers.

Understanding What MACRA Is

MACRA stands for Medicare Access and CHIP Reauthorization Act which was signed by President Obama in 2015. The categories decided by the Merit-based Incentive Payment System, or MIPS include:

  • Quality of healthcare
  • How are resources used?
  • Improvement rates of the patients
  • Electronic health records (HER) technology usage

The scores are out of 100 and physicians are rewarded according to the criteria set above. This is especially great for patients as they’re the ones on the receiving end of this model as their trips to the hospital are aimed to decrease following value based payment.

But why do almost 60% of physicians agree on the fact that this model will negatively impact their practice? That’s because most of them find this system adds stress to the existing system.

Why Are There Disagreements and Challenges Regarding The Model?

The Healthcare field has experienced several reforms over the years and the value-based payment reform is one of them. This payment model offers certain financial incentives to hospital groups, medical groups and physicians for completing certain performance measures. Unfortunately, there is little agreement between different groups within the field on how to implement this model and go forward with it.

There isn’t a unanimous decision reached on which group is most responsible for pushing provider payment reforms forward when asked from a group of physicians and employers. The answers were equally divided between government, health systems, insurers, physicians, employers and even patients, implying both groups aren’t fully motivated to take charge in leading this change neither are they sure who to follow to progress in it.

What is even worse is the fact that physicians and employers don’t see eye to eye on things that make it difficult to adopt such provider payment reforms. According to a survey around 50% physicians think the high regulatory burden is the biggest barrier while 27% of employers say the provider’s hesitation to participate is the largest barrier. It is alarming that both employers and doctors don’t think of their own actions as a barrier to adoption.

An evident problem in addition to disagreement over value-based payment between employers and physicians is the lack of knowledge of physicians on the law and its requirements with only 4% of them claiming to be familiar with MACRA or APM and what they stand for.

Leavitt Partners after constant research and surveying have come to a conclusion, that physicians are struggling with issues on MACRA and value-based payment due to lack of understanding and awareness of underlying problems and the efforts required for reforms.

The value-based payment impacts earnings of the doctors as the reimbursement rates fell.

Additionally, they also have to make investments in top quality tools and equipment to ensure that the medical care provided is up to standard. Plus, the burden of documentation, data collection, and paperwork all lies on the doctors. This adds to the costs and expenses. In that case, they might be forced to look for a health care merger or even an acquisition is possible.

Some have even expressed that the model is somewhat unclear and could lead to further difficulties for physicians to receive their reimbursements. Managers and employers on the other hand feel that the value-based payment model drives up organization profits.

However, given the tough conditions set by the model, the value-based system has endless cons for physicians. There is also reduced transparency between the payers and medical staff.

Physicians find that this value based payment method is too strenuous and increases complexities, plus they rarely have enough data about the patient to improve the healthcare outcomes. Investing in an advanced business model to achieve all that is too much for most physicians. That’s why they choose to stick to the easier fee for service model which makes payments separately for each service. But the fee for the service model makes physicians perform more procedures and treatments as their pay depends on it.

Although the value based payment model itself sounds great, implementation has been faulty and unpopular among physicians.

The Takeaway

Although launched to incentivize physicians to provide better quality medical care to Americans, the value based payment model has not done too well.

It is evident that the road to proper value-based payment, with quality care from providers and customer convenience in mind, is not an easy one. Employers and physicians both need to set aside their differences and stop pointing fingers at each other because that only adds to the challenge.

Things that can help this model succeed are:

  • Clinically combined physician networks
  • Efficient data collection
  • Application of analytics for quality improvement

There should be a mutual understanding between the two with a strategy in mind to pursue which helps them tackle the barriers to adoption. The goal of improving both the quality and costs of health services to patients should be kept in mind throughout.

The fee-for-service contracts are still what most practitioners are following. However, there are chances that value based payments will prevail due to the efficiency it adds to the medical system.

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