Hospitals picking up the pace with value-based contracts, Kaufman Hall survey finds

As of February, 42 percent of hospitals reported that 10 percent or more of their revenue stems from value-based contracts, according to a survey from Kaufman, Hall & Associates.

That's nearly twice as many hospitals compared with the survey response from six months ago. In August 2014, only 22 percent of hospitals that reported 10 percent or more of their revenue stemmed from these types of contracts.

The survey found even more dramatic growth in expectations for future use of value-based payments. The percentage of responding hospitals anticipating that value-based contracts will constitute 50 percent or more of their revenue within the next 24 months tripled in six months, from 7 percent to 22 percent.

"These findings suggest that more providers are viewing the movement toward value-based payment as inevitable," said Mark E. Grube, Managing Director, Kaufman Hall. "As the shift from volume to value gains momentum, hospitals and health systems need to move quickly to understand the likely trajectory in their markets, to identify their desired role, and to make the significant structural and operational changes needed to succeed in the changing business model."

The survey findings follow two big developments in the industry's move to value-based care delivery. In January, HHS announced its goal to shift half of Medicare payments to value-based models by 2018. A couple of days later, the Health Care Transformation Task Force —  which includes 20 insurers and provider organizations such as Boston-based Partners HealthCare and Livonia, Mich.-based Trinity Health — committed the goal of moving 75 percent of their businesses to value-based arrangements by 2020.

In another sign of healthcare’s shifting business model, the Kaufman, Hall & Associates survey also found 85 percent of respondents reported an increase in outpatient visits in the last six months of 2014, up from 72 percent in the first six months of 2014.

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