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25% of Provider Organization Revenues Tied to Value-Based Payments

Analysis  |  By Jack O'Brien  
   March 10, 2020

Despite the popularity of accountable care organizations, leaders are still more concerned about maintaining the strength of the bottom line.

One-quarter of provider organizations have revenue tied to value-based payments (VBP), according to a survey commissioned by DataGen and conducted by Sage Growth Partners that was released Tuesday morning.

The majority of providers plan to enter into a VBP arrangement or expand an existing one in the next two years and half of respondents stated that they expect VBP to become the primary revenue model by 2025.

Accountable care organizations (ACO) are the most popular forms of VBP participation, with more than 60% of respondents saying that they currently participate in one.

Additionally, just over half of respondents stated that they participate in Medicare episode-specific bundled payment models, over a third participate in patient-centered medical home, and just under 30% participate in capitation.

Related: CareMount Leads on Value-Based Care Strategies With an Eye on Physician Compensation

Despite the popularity of ACOs, leaders are still more concerned about maintaining the strength of the bottom line compared to population health initiatives.

Around 75% of organizations are more focused on cost reduction and efficiency improvement as top strategic priorities.

Budget concerns represent the top reason provider organizations will not invest in VBP models, according to the survey, with less than a third of respondents stating that participation in alternative payment models is a priority for 2020.

Related: MSSP ACO Participation Remains Flat in 2020

"Healthcare organizations are feeling pinched financially as margins continue to shrink," Mike Ilnicki, president of DataGen, said in a statement. "Expanding and entering into VBP models will require significant data analysis, planning, and a keen understanding of VBP opportunities as healthcare organizations look to succeed in the future."

Related: Value-based Metrics Penalize Top-Performing Hospitals

The respondents most willing to take on additional risk are large provider organizations, according to the survey, as hospitals with more than 550 beds reported that nearly 38% of revenues are tied to VBPs.

From the clinical perspective, nearly all survey respondents indicated that quality has improved to some extent.

Still, leaders remain concerned about the bottom line, as less than half of respondents said that financials have improved "significantly or moderately" as a result of VBPs.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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