The “shift to value-based care” was on everyone’s lips at HLTH — but more than a decade after it began, ingrained provider dynamics and unequal market-wielding power continue to slow the fee-for-value train, Axios reports.
Why it matters: The current fee-for-service system is essentially the opposite of the “apple a day” philosophy: It rewards high-cost and high-volume procedures and disincentivizes preventive care.
Yes, and: A looming recession, skyrocketing costs of health care and a tight market are encouraging companies to dip their toes into value-based payments (VBP) models.
Yes, but: Despite renewed exuberance among executives about value-based payments at HLTH, the reality is less sunny.
By the numbers: Value-based payments made up just 6.7% of primary care revenue in 2021, according to a recent MGMA report.
Zoom in: The headwinds for VBC in the commercial space are formidable, per a January article in the journal Health Affairs.
  • Powerful incumbent providers are wielding disproportionate market leverage when negotiating reimbursement with health plans, the authors write.
  • “[M]any providers have significant ability to negotiate high commercial fee-for-service rates or gain ‘must-have’ status in a given market by offering differentiated services,” the authors write, “for example, as the only hospital offering bone marrow transplants.”

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