• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer

  • Opinion
  • Health IT
    • Behavioral Health
    • Care Coordination
    • EMR/EHR
    • Interoperability
    • Patient Engagement
    • Population Health Management
    • Revenue Cycle Management
    • Social Determinants of Health
  • Digital Health
    • AI
    • Blockchain
    • Precision Medicine
    • Telehealth
    • Wearables
  • Startups
  • M&A
  • Value-based Care
    • Accountable Care (ACOs)
    • Medicare Advantage
  • Life Sciences
  • Research

Report: Healthcare Organizations are Seeing Improved Profits from Value-based Care Contracts

by Fred Pennic 06/29/2018 Leave a Comment

  • LinkedIn
  • Twitter
  • Facebook
  • Email
  • Print

Value-based Care Contracts: 46% of Providers are Seeing Improved Profits

46% of healthcare organizations see value-based care contracts improving profitability versus 23% two years ago.

Healthcare organizations are more optimistic about how value-based care will affect their finances, according to a poll of accounting and finance employees on a webcast that KPMG hosted. Government spending on healthcare through Medicare, Medicaid, Veterans Administration and other programs have been shifting to value-based payment models in an attempt to improve efficiency and tie the quality of care to payment.

KPMG’s poll of 221 managers and executives during a June 5 webcast, revealed that 46 percent of healthcare organizations see improved profits from value-based contracts, compared with 23 percent when the same question was asked during a webcast two years ago. About a third of respondents in this year’s webcast see value-based contracts as having a neutral impact versus one quarter in the prior survey. A slight majority saw value-based contracts hurting profitability in 2016.

“We are beginning to see performance based payment models replacing traditional fee-for-service models,” said Matt Snyder, KPMG advisory principal who focuses on internal audit and enterprise risk at healthcare organizations. “The need to shift from volume to value is shared by payers, providers, and ultimately patients.”

Value-based Payments Still Minority

Healthcare care providers still largely get paid by the “fee-for-service” model that links reimbursement to activity. Only 10 percent of respondents said they had a majority of their contracts tied to value-based reimbursement, such as shared savings, bundled payments (a flat-rate for a given medical procedure), or capitation for a given patient population.

Approximately 49 percent of respondents said their contracts represented a small percentage (less than 10 percent) of their contracts.

Value-based Care Contracts Hurting Profitability

A slight majority (52 percent) of respondents in the 2016 survey saw value-based contracts hurting profitability and about a third (35 percent) expected this form of reimbursement to dampen their finances when asked in 2014. In this year’s survey, only 20 percent expect lower profitability.Healthcare executives will have to focus on high quality, transparent and secure data reporting capabilities to succeed in this climate, Snyder said.

“It is key to generate, assemble, and share data in a reportable manner to help reap the benefits of value-based reimbursement,” Snyder said. “In addition to other reporting requirements, payers are increasingly playing the role of ‘data service platform’ to healthcare providers in order to help them manage patient care. Our clients are finding significant value in having us help them with developing standardized processes and internal controls. ”

 

  • LinkedIn
  • Twitter
  • Facebook
  • Email
  • Print

Tagged With: Revenue Cycle Management, Value-Based Care

Tap Native

Get in-depth healthcare technology analysis and commentary delivered straight to your email weekly

Reader Interactions

Primary Sidebar

Subscribe to HIT Consultant

Latest insightful articles delivered straight to your inbox weekly.

Submit a Tip or Pitch

Featured Insights

2025 EMR Software Pricing Guide

2025 EMR Software Pricing Guide

Featured Interview

Paradigm Shift in Diabetes Care with Studio Clinics: Q&A with Reach7 Founder Chun Yong

Most-Read

Medtronic to Separate Diabetes Business into New Standalone Company

Medtronic to Separate Diabetes Business into New Standalone Company

White House, IBM Partner to Fight COVID-19 Using Supercomputers

HHS Sets Pricing Targets for Trump’s EO on Most-Favored-Nation Drug Pricing

23andMe to Mine Genetic Data for Drug Discovery

Regeneron to Acquire Key 23andMe Assets for $256M, Pledges Continuity of Consumer Genome Services

CureIS Healthcare Sues Epic: Alleges Anti-Competitive Practices & Trade Secret Theft

The Evolving Role of Physician Advisors: Bridging the Gap Between Clinicians and Administrators

The Evolving Physician Advisor: From UM to Value-Based Care & AI

UnitedHealth Group Names Stephen Hemsley CEO as Andrew Witty Steps Down

UnitedHealth CEO Andrew Witty Steps Down, Stephen Hemsley Returns as CEO

Omada Health Files for IPO

Omada Health Files for IPO

Blue Cross Blue Shield of Massachusetts Launches "CloseKnit" Virtual-First Primary Care Option

Blue Cross Blue Shield of Massachusetts Launches “CloseKnit” Virtual-First Primary Care Option

Osteoboost Launches First FDA-Cleared Prescription Wearable Nationwide to Combat Low Bone Density

Osteoboost Launches First FDA-Cleared Prescription Wearable Nationwide to Combat Low Bone Density

2019 MedTech Breakthrough Award Category Winners Announced

MedTech Breakthrough Announces 2025 MedTech Breakthrough Award Winners

Secondary Sidebar

Footer

Company

  • About Us
  • Advertise with Us
  • Reprints and Permissions
  • Submit An Op-Ed
  • Contact
  • Subscribe

Editorial Coverage

  • Opinion
  • Health IT
    • Care Coordination
    • EMR/EHR
    • Interoperability
    • Population Health Management
    • Revenue Cycle Management
  • Digital Health
    • Artificial Intelligence
    • Blockchain Tech
    • Precision Medicine
    • Telehealth
    • Wearables
  • Startups
  • Value-Based Care
    • Accountable Care
    • Medicare Advantage

Connect

Subscribe to HIT Consultant Media

Latest insightful articles delivered straight to your inbox weekly

Copyright © 2025. HIT Consultant Media. All Rights Reserved. Privacy Policy |