The health care industry’s transition to a value-based payment landscape is alive and well, according to a recent Trendwatch report from the American Hospital Association (AHA).
“Hospitals and health systems — influenced by both policy and market forces — are increasingly moving away from fee-for-service payments towards value-based arrangements,” the AHA advises.
Value-based payment (or value-based purchasing — the terminology is synonymous and depends mostly on whether you are taking the payer or the provider perspective) is any payment arrangement in which reimbursement is affected by factors other than the volume of service provided. These factors can include treatment cost, quality, and patient experience.
Similarly broad, the value-based payment landscape isn’t a single destination, either, the AHA points out. Hospitals and health systems can choose from several different types of value-based payment arrangements. What they end up participating in, the AHA reports, is largely based on the level of financial risk they can, and are willing to, take on.
VALUE-BASED PAYMENT MODELS
Here’s a look at the range of value-based payment models AHA says hospitals are engaging in through commercial payers, Medicare, and Medicaid:
The riskier the value-based payment model, the more expansive the competencies needed for a hospital to succeed, the AHA advises. These include provider contracting and network management, clinical and care management, risk and financial management, and analytics. The culture of the health care organization, too, plays a role.
As does timing. According to the AHA, a health care organization’s value-based destination may change over time, with subsequent changes in policy, market, and organizational forces.
Value-based payment is not a one-size-fits all structure.
“There is no single model that will work for every organization,” the AHA report explains. “Hospital and health system leaders should assess the personnel, infrastructure, and other capabilities required for success in each model when considering the most appropriate path for their organization.”
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How much higher were their scores than national CMS averages? What is the connection between higher VBP scores and increased reimbursements?
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