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Forbes Insights Study Signals Imminent Health Care Shift Toward Value-Based Purchasing (VBP)

Stocks in this article: MDRX

Forbes Insights today released “Getting From Volume to Value in Health Care: Balancing Challenges & Opportunities, a study examining health care professionals’ opinions about value-based purchasing (VBP). VBP is now widely seen as a replacement for traditional fee-for-service reimbursement . A crucial unanswered question is how quickly VBP will go from accepted concept to actual contracts. Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX) sponsored the study.

The responses of more than 200 hospital and health system senior executives in the survey reflect the balancing act that’s necessary to get their organizations from the-way-things-have-always-been to the-way-things-will-be without tumbling into a financial chasm because of the-way-things-are now. The executives' concerns focused on three broad areas: the speed, scope and synchronization of VBP-related change.

"Physicians have been paid on a fee-for-service basis since Hippocrates made his first house call," said Michael L. Millenson, president of Health Quality Advisors LLC and the author of the report. "Value-based purchasing represents a true paradigm shift to paying for value instead of volume."

Key findings of the study included:

• An Imminent Shift: Almost three-quarters (73%) of the C-suite executives surveyed completely or somewhat agreed that providers must immediately begin shifting their focus from volume to value.

• Disruptive Potential of Value-Based Purchasing: Nearly four in ten respondents (38%) completely or somewhat agreed that VBP is likely to become a truly disruptive innovation.

• Crucial to Win Hearts and Minds: Fully engaging their doctors was seen by surveyed C-suite executives as the top barrier to VBP participation, selected by half of respondents.

• A Warning on Consumer-Driven Health Plans: About two-thirds of surveyed executives believed that consumer financial incentives are key to making VBP successful (64%). However, about the same percentage (67%) also thought that consumers won’t know when that success arrives, since they can’t judge the value of medical care accurately. That’s a flashing warning sign for those who believe that the high-deductible health insurance arrangements known as consumer-driven health plans will automatically drive value-based purchasing on the part of the patient.

• VBP Will Require Seamless Communications: Nearly half of respondents chose system integration across all applications (49%) and health information exchange (47%) among their top IT spending priorities for VBP over the next three years.

Despite the challenges, executives interviewed in greater depth shared a common optimism. As Dr. Robert Margolis, CEO and managing partner of Torrance, Calif.-based HealthCare Partners, put it: “You manage by having a strong vision people believe in, mission and values, and lots of communication.”

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