Insurers have big plans for value-based doctor payments

They expect to move away from fee for service quickly but first must overcome technological barriers.

By — Posted May 27, 2013

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Private health insurers have great ambitions to shed fee-for-service payment systems to physicians in favor of value-based models. For the moment, their plans are being held back only by the amount of data insurers can exchange with doctors.

Twenty percent of health plans said at least half their business was supported by value-based payment models by the end of 2012, according to a survey of 39 insurers by Porter Research on behalf of Availity, a health information network in Jacksonville, Fla. In three years, 45% of plans expect half their business to be supported by value-based payments. In five years, that number is expected to be 59%.

The survey found that 82% of health plans consider the development of new payment models a “major priority” for their organizations. Health insurers generally are making the biggest effort to convert from fee-for-service to value-based payments in their employer group plans, with 75% saying they were doing so. By comparison, 54% said Medicare plans were a priority for this transition, 46% said Medicaid plans were, and 44% named individual plans. Respondents could choose more than one answer.

A way to rein in costs

The findings mirror other studies and discussions that have taken place in the wake of the Affordable Care Act and other reforms. Payers and others in the health industry view value-based payment models as a way to improve care and control costs by rewarding doctors for quality rather than the number of procedures performed or patients seen. Insurers have implemented pay-for-performance plans and joined doctors and hospitals in accountable care organizations to make the conversion from straight fee for service.

One factor health plans said was essential to their move to value-based payments is technology. Availity reported that 90% of health insurers said automating information exchange is “critical” to the success of value-based payment programs.

Less than 50% of insurers, however, said they had real-time automation capabilities between themselves and doctors, and 90% said they use computers and paper for information exchange. The study did not detail whether plans believed the lack of technology was because of problems on their end, or a result of many physicians just beginning to adopt electronic health records under the federal meaningful use program, or a combination of the two.

However, 75% of plans said they will automate information exchange with doctors in the next 12 to 18 months so they can begin to implement or expand value-based payment models.

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External links

“Health Plan Readiness to Operationalize Value-Based Payment Models,” Availity research study, April (link)

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