Survey: These are the risk-based payment models health systems are pursuing

After the Covid-19 pandemic put several procedures on hold, health systems are looking to diversify into risk-based payment models next year. The majority of them are looking to enter Medicare Advantage models, according to a survey of more than 100 provider CFOs and managed care executives.

The survey, conducted by the Healthcare Financial Management Association and produced by Guidehouse, found that providers are looking to take on a broad range of risk-based payment strategies. While Medicare Advantage plans were the most popular choice, health systems are also considering other payment models for 2022. Here’s a breakdown of their responses:

  • Medicare Advantage (59%)
  • Commercial employer-based risk contracts (52%)
  • Medicare alternative payment models (49%)
  • Managed Medicaid (36%)
  • Direct-to-employer partnerships (33%)

“While traditional payer and provider relationships have taken a hit in this evolving market, the ones that we see working are payvider models that create value for both entities,” Travis Sherman, a director at Guidehouse, said in a news release. “The one-size-fits-all, ‘I-win-you-lose’ approach is no longer a good business model. Industry disruption has created new opportunities for health systems to rethink the structure of their payer and provider partnerships, reassess their markets for new entrants with a willingness to innovate together, and readjust their network strategy to align with where their market is going.”

While the interest may be mutual, there are several challenges to getting there. Health systems said their biggest external challenge to pursuing “payvider” models was striking strategic partnerships with payers.

Meanwhile, their biggest internal challenges were data and technology costs, integrity and reporting. About half of respondents said they planned to build these capabilities in-house, while 30% said they would partner with health plans for these capabilities, and 21% plan to outsource them to third-party vendors.

“Unfortunately, many well-intentioned payer and provider partnerships never come to fruition due to challenges with operationalizing and implementing risk-based models,” Dr. Nicole Fetter, a director at Guidehouse, said in a news release. “Organizational commitment, a cohesive governance structure, and adequate investment in a strong data-driven infrastructure is required to overcome these obstacles and achieve success.”

Notably, health system leaders are also keeping an eye on industry disruptions that they see as potential barriers to success. Their biggest concerns were vertically-integrated health plans, such as a UnitedHealth Group’s large provider network, and consumer-facing companies, such as CVS and Amazon.

Here’s the full report. 

Photo credit: JamesBrey, Getty Images

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