As the healthcare industry transitions from a fee-for-service system to value-based payments, a number of different factors can present obstacles or facilitate successful payment reform, according to a Robert Wood Johnson Foundation report.
These facilitators and barriers to payment reform fall into four main categories — market-based, governmental, organizational and design. Some factors can either help or hurt the transition to the new payment system, depending on the circumstance, according to the report.
Market-based factors
The characteristics of plans, providers and purchasers in the market affect reform efforts. In terms of facilitators, prior or simultaneous payment reform initiatives can spark similar efforts in the market. Additionally, a culture of collaboration, trust and mutual respect between organizations in the market and a willingness to work together increase the odds of payment reform success. Furthermore, concerning providers, integrated delivery systems capable of taking on risks have a positive effect on reform.
Dominant, large providers, health plans and employers in the market can either help or hinder the transition to value-based payment, depending on their willingness to participate. If they commit themselves to reform, they can create a "keeping up with the Joneses" effect and make great strides with their considerable resources, according to the report. Small or safety-net providers can also either complicate or facilitate reform. Due to their lack of resources and infrastructure, these organizations can struggle to revamp payment systems. Still, safety-net facilities can achieve reform success, if they have adequate resources.
State-based "domestic" health plans can drive reform if they recognize the value of working together to develop a bundled payment system, but inaction on their part can also drag down efforts to change the payment system. Additionally, multi-payer efforts can encourage provider involvement by reducing administrative burdens, but these initiatives can also slow down reform by bringing the group down to the level of the lowest common denominator, according to the report.
When it comes to market-based barriers, a highly competitive environment without a dominant health plan and/or provider isn't conducive to the sort of collaboration that can ease payment system transitions.
Governmental factors
State-based payment reform efforts can get a significant boost if the governor demonstrates a commitment to changing the system, according to the report. Additionally, establishing a requirement or presenting the opportunity for healthcare providers that have contracts with Medicaid or the state employee benefits program to implement alternative payment models increases the odds of successful reform.
On the other hand, apathy and a lack of willpower on the part of the governor or state legislators can slow the process of moving away from fee-for-service payments. Furthermore, differences in reform goals between disability advocates and providers and the health care community can present an obstacle. Those pushing for payment reform may want a delivery model that integrates preventive, acute and long-term services, but disability advocates have expressed concern that this would "medicalize" long-term services, according to the report. Difficulties in coordinating Medicaid with commercial payment reform efforts because of different population characteristics can also be a challenge, although not a major obstacle.
Organizational factors
The characteristics of providers, payers, employers and other organizations can have a significant effect on payment reform. Strong, trusted leadership figures driving change and having access to and the ability to analyze data can strengthen efforts to change the system. Strong affiliations with other payers or providers, timely feedback on performance and relationships with trusted third-party entities to facilitate design and implementation aid reform efforts, according to the report. Finally, organizations with adequate staffing and/or outside technical assistance to complete the transition to a new payment system are more likely to achieve their goals.
On the other hand, a lack of affiliations, not having access to relevant data and not understanding or underestimating the work required can leave healthcare organizations stuck in the world of fee-for-service.
Design factors
Payment reform plans that are proven to save providers and payers money, easy to understand and fit within the context of their environment are the most likely to succeed, according to the report. Conversely, targeting a patient population that's too small to lead to significant savings and motivation to implement the reform effort isn't likely to work out. The same outcome is likely if the providers participating in a pilot project have too small of a population, meaning the results might not be statistically significant.
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