Value-based contracts will hurt profits despite being viewed by many as an important way to contain healthcare costs, a poll of almost 300 healthcare executives conducted by KPMG found. Nonetheless, providers are going to have to institute new technologies to get there.
“Healthcare companies need to prepare for a dramatic shift in how they get paid,” Dion Sheidy, KPMG’s Advisory Healthcare Leader, said in a statement. “They need to arm themselves with analytics to make the case that value and quality are being delivered in patient care and to compete more effectively in their respective markets.”
KPMG found that among the 292 respondents, 45 percent said they expected a drop in profits because of the shift to value-based care, compared to 30 percent of respondents asked the same question in 2014.
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And a majority of respondents, in fact, said they expect a drop in profits from value-based contracts, while 25 percent expect a neutral impact on operating results and only 23 percent anticipate improved profitability.
KPMG’s survey also found that updated healthcare IT systems among healthcare providers will have the biggest effect on the efficiency of care as certain processes get automated (34 percent) and upon the ability to measure and influence clinical quality and outcomes (32 percent).
The move from volume to value promises to improve care outcomes, reduce costs of care delivery and essentially pay healthcare providers to better manage patient populations.
The Centers for Medicare and Medicaid Service set ambitious targets in January 2015 to move 90 percent of Medicare fee-for-service payments to value-based purchasing by 2018 — although a recent survey by Health Catalyst discovered that thus far only 3 percent of providers are on-board.
KPMG’s survey found changes in perception of value-based care from two years ago, notably that providers are now saying consumer expectation around technologies such as telemedicine tools is greater, as is the need to compete with retail clinics, offer same day surgery and other low-acuity services.
Respondents also indicated that they expect less emphasis on disease management or the use of physician assistants or nurse practitioners instead of doctors, compared with two years ago.
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