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HFMA Survey: Value-Based Payment Readiness

Earlier this year the Healthcare Financial Management Association surveying a sampling of senior financial executives in hospitals and health systems to learn more about healthcare’s readiness for value-based care. The survey probed for the current state of readiness, projected needs, anticipated gaps and penetration, the financial impact to date of their efforts, and perceptions on enabling risk-based contracting.

Here are some of the key findings:

  • Over half of respondents said their system had achieved a positive return on investment from a value-based program.
  • Yet nearly 40% don’t feel their organization has the needed capabilities to succeed within 3 years in risk-based value arrangements when if comes to interoperability, business intelligence, real-time data access, and effective chronic care management.
  • Such gaps are of concern when respondents expect 30-70% of their payments will include value-based mechanisms with 3 years.
  • Competencies involving data analytics ranked highest among respondents in the likelihood of enabling value-based payment success.


HFMA’s executive survey: value-based payment readiness. Healthcare Financial Management Association; Humana, May 2015. http://www.hfma.org/WorkArea/DownloadAsset.aspx?id=30969

Value-based payment readiness; HFMA research highlight. Healthcare Financial Management Association, June 3, 2015. http://www.hfma.org/value-basedpaymentreadiness/

Posted by AHA Resource Center (312) 422-2050 rc@aha.org

Value-Based Contracting for Hospitals

A new guide on value-based contracting is available to assist hospitals and health systems with the evolution of the nation’s health delivery system from a fee-for-service to a value-based payment model. The guide discusses the following:

  • Foundational requirements, including the need for shared goals and incentives, strong leadership and governance, and unified persistence
  • Assessment and preparation, covering desired position, service area, system infrastructure, resources, contract scope, types of arrangements and risks, capacity to carry risk, and the time frame for the transition
  • Financial and operational requirements, such as capital needs, unit costing/tracking, financial and actuarial assessment/planning, contracting capabilties, and data infrastructure
  • Evaluating a contract from the perspectives of responsibilities and risk, financial impact, and credit risk
  • Implementation success factors, encompassing physician engagement, transparency and accountability, and performance measurement and improvement

Other helfpul resources are also listed in the guide.

Source: Pizzo JJ and others of Kaufman, Hall and Associates. Value-based contracting. Signature leadership series. Health Research and Educational Trust/American Hospital Association, July 2013. http://www.hpoe.org/Reports-HPOE/Value-Based_Contracting_KaufHall_2013.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Bundled Payments: Implementation & Operation

Bundled payments are an alternative model to the traditional fee-for-service model used in the U.S. for paying for health services. The bundled payment model pays a fixed amount that covers care services for a particular condition over a defined time period. The Health Care Incentives Improvement Institute identified and studied 19 non-federal bundled payment initiatives underway. The results are shared in an article that provides concise answers for the following questions:

  • Why are bundled payments being pursued?
  • What conditions are most commonly bundled?
  • How are bundles defined?
  • What services are included within a bundle?
  • When does the bundle start and stop?
  • What patients are included, and are there any factors that would exclude them from a bundle?
  • What is the process for reaching agreement on a bundle definition?
  • How do payers qualify providers for bundled payment arrangements?
  • How are rates set for the bundle?
  • What is the time period from bundle planning to implementation?
  • Does insurer claim data support implementation of bundled payment rates?
  • How are payments made?
  • How to plans track and report spending within the bundle?
  • Are the bundles adjusted for performance in any way?
  • What types of risk arrangements are in place?
  • How many patients are involved in bundled arrangements?
  • What results have been produced by the existing initiatives?
  • How do the payer and provider
  • How do the interviewees involved in the study see the future of bundling?

The participating bundled payment organizations identified and interviewed for the article are listed. Also included is a detailed list of inpatient and outpatient procedural conditions and chronic and acute conditions that are currently subject to or are planned for payment bundling .

Source: Painter MW. Bundled payment across the U.S. today: status of implementations and operational findings. Health Care Incentives Improvement Institute Issue Brief, June 1, 2012. http://www.hci3.org/sites/default/files/files/HCI-IssueBrief-4-2012.pdf

Related resources:

Committee on Research. Bundled payment: AHA research synthesis report. American Hospital Association, May 2010. http://www.aha.org/research/cor/content/BundledPayment.pdf

Hussey PS and others. The PROMETHEUS bundled payment experiment: slow start shows problems in implementing new payment models. Health Affairs, 30(11):2216-24, Nov. 2011. http://content.healthaffairs.org/content/30/11/2116.abstract

Berenson RA. Moving payment from volume to value: what role for performance measurement? Robert Wood Johnson Foundation, Dec. 14, 2010. http://www.rwjf.org/qualityequality/product.jsp?id=71568

Bundled payments for care improvement. Center for Medicare & Medicaid Innovation, accessed June 4, 2012 at http://www.innovations.cms.gov/initiatives/bundled-payments/index.html

Practice Management Center. Bundled payments. American Medical Association, accessed June 4, 2012 at http://www.ama-assn.org/ama/pub/physician-resources/practice-management-center/claims-revenue-cycle/managed-care-contracting/evaluating-payment-options/bundled-payments.page

Cutler DM and Ghosh K. The potential for cost savings through bundled episode payments. New England Journal of Medicine, 366:1075-1077, Mar. 22, 2012. http://www.nejm.org/doi/full/10.1056/NEJMp1113361

Sood N and others. Medicare’s bundled payment pilot for acute and postacute care: analysis and recommendations on where to begin. Health Affairs, 30(9): 1708-17, Sept. 2011. http://content.healthaffairs.org/content/30/9/1708.abstract

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org