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Value-Based Programs Expected to Boost Growth, Revenue

News  |  By Jonathan Bees  
   May 18, 2017

One in four hospital patients are currently in value-based programs, but in three years’ time, that number will double, survey data suggests.

Despite hurdles, expectations for net patient revenue growth from value-based payment models is bullish.

Respondents in the May 2017 HealthLeaders Media Value-Based Readiness Survey indicate that while value-based care is still in the early stages of adoption, they expect robust growth in the share of patients in value-based programs.

Survey respondents say that 26% of their patients are currently in value-based programs, but in three years’ time, that number will double to 52%.

Survey results also reveal that hospitals are leading the way in value-based adoption. A greater share of hospital patients (32%) are currently in value-based programs than those in health systems (27%) and physician organizations (20%). Looking ahead three years, a greater share of patients will be in value-based programs at hospitals (58%) and health systems (55%) than physician organizations (45%).

Consistent with the survey results projecting growth in the share of patients in value-based programs, respondents' expectations for net patient revenue growth from value-based payment models is also bullish.

Respondents say that their net patient revenue percentage is currently 23% value-based, and they say this will more than double to 48% in three years.

Hospitals (32%) currently have larger shares of net patient revenue coming from value-based payment models than health systems (24%) and physician organizations (17%).

Looking ahead three years, hospitals (56%) will continue to have larger shares of net patient revenue coming from value-based payment models than health systems (48%) and physician organizations (44%).

Although expectations for value-based growth are strong, they may be overly optimistic. The survey results indicate that there are many hurdles still remaining, such as developing care and payment models and competencies that address longitudinal patient care and the alignment of independent physicians/providers, to name just two areas cited by respondents. Without such things, value-based care will still exist, but in a more limited form.

Pamela J. Stoyanoff, MBA, CPA, FACHE, is executive vice president, chief operating officer at Dallas-based Methodist Health System.

She describes the hurdles holding back widespread adoption of value-based care this way: "Even though we talk about population health, we are still paid largely for episodic care, not longitudinal care. That's been the issue for years. In order for hospitals to manage populations and really truly improve health, we have to manage along the whole continuum of care, but right now we're not paid or incented to do that very much."

Jonathan Bees is a research analyst for HealthLeaders.


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