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Survey: Most providers, insurers avoid risk-based contracts

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A new survey of 500 providers and insurers finds that most providers aren’t prepared to take on risk-based contracts.

About 20 percent of providers surveyed said that they get no revenue from risk-based contracts and 57 percent said that such revenue accounts for less than 10 percent of their total revenues, says the second annual State of Population Health survey by Numerof & Associates, a healthcare-strategy consulting firm.

Respondents see value-based contracts taking hold much more slowly than they did even a year ago.

Numerof President Rita Numerof said hospitals, doctors and insurers have found it more difficult and more expensive  than expected to implement the software and population health-management processes necessary to successfully accept value-based care.

Len Nichols, director of the Center for Health Policy Research and Ethics, at George Mason University in Fairfax, Va., told Modern Healthcare that hospitals are either not eager to bear downside risk because they fear such risk, or they cannot find health plans willing to share the data needed to negotiate contracts.

”Moreover, hospitals appear to have good reason to be skittish about taking on risk-based contracts, according to a survey of 142 providers last summer by KPMG. The firm found that 52 percent expected their value-based contracts to lead to a drop in operating profit or surplus. That’s compared with 47 percent two years ago.

“And some providers think they still have time to implement value-based purchasing and are dragging their feet since fee-for-service has survived government efforts to reform payment. While both political parties agree that healthcare costs should be lowered, the current divisiveness even within the GOP’s efforts to repeal and replace the Affordable Care Act, which spearheaded many valued-based efforts, is not helping the move away from fee-for-service.”

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