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

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.”

“We are committed to helping our clients through this change, which is why we sponsored this survey,” said Glen Tullman, Chief Executive Officer of Allscripts. “The results make it clear that the industry sees some hurdles to making value-based purchasing work. We’re continuing to develop tools and solutions to help our clients make the shift successfully.”

This report is based on a survey of 204 senior hospital and health system executives across the US regarding the advent of value-based health care, as well as interviews with eight industry executives and observers. The study is available at www.forbes.com/forbesinsights.

About Forbes Insights

Forbes Insights ( www.forbes.com/forbesinsights) is the strategic research practice of Forbes Media, publisher of Forbes magazine and Forbes.com. Taking advantage of a proprietary database of senior-level executives in the Forbes community, Forbes Insights’ research covers a wide range of vital business issues, including: talent management; marketing; financial benchmarking; risk and regulation; small/midsize business; and more.

About Allscripts

Allscripts (NASDAQ:  MDRX) delivers the insights that healthcare providers require to generate world-class outcomes. The company’s Electronic Health Record, practice management and other clinical, revenue cycle, connectivity and information solutions create a  Connected Community of Health™ for physicians, hospitals and post-acute organizations. To learn more about Allscripts, please visit  www.allscripts.com, Twitter, YouTube and It Takes A Community: The Allscripts Blog.

Copyright Business Wire 2010

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