McKesson research: fee-for-service to be eclipsed by value-based reimbursement by 2020

June 13, 2014

McKesson has announced the results of a major benchmark study that measures the state of healthcare’s transition from volume (fee-for-service) to value (value-based care). The national research study included payers and hospitals across a range of organization sizes and regions. The 2014 State of Value-Based Reimbursement, surveying 464 payers and hospitals, was published this week.

For this study, McKesson commissioned ORC International to determine a baseline for the state of the industry's transition from fee-for-service to value-based reimbursement (VBR). The study’s goal was to get an evidence-based understanding of how stakeholders are reacting to industry change and demands, what reimbursement models and technology they’re using, how they’re managing, what’s working, what’s not working, and where they expect to be in the next few years.

One big takeaway is that fee-for-service is rapidly being eclipsed by value-based models. More than two-thirds of payments are expected to be based on value measurement in five years, up from just one-third today. According to McKesson representatives, other key findings include:

  • Payers and hospitals are aligned on embracing payment with value measures.
  • Alignment with value-based reimbursement adoption varies depending on what the region looks like. Collaborative regions, where one or two payers and hospitals are market leaders, are closer to value-based reimbursement than fragmented regions.
  • Alignment is also influenced by the care delivery model. ACOs are significantly closer to value-based reimbursement adoption than non-ACOs.
  • Fee-for-service is expected to be largely replaced by pay-for-performance (P4P).
  • P4P is poised to take hold most strongly, but payers and hospitals say it is the most challenging to implement.
  • Key obstacles payers and hospitals need to overcome are technology-related.
  • Technology to catalyze clinician engagement will be crucial for VBR to succeed.

Download the study.

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