Report says physicians seek clarity on alternative payment models

Report says physicians seek clarity on alternative payment models November 12, 2018

An update to a 2014 report examining alternative payment models (APMs) and their effects on physicians has just been released. The study, “Effects of Health Care Payment Models on Physician Practice in the United States,” was sponsored by the American Medical Association (AMA).

The comprehensive study includes a range of payment models, including:

• Core payment (fee for service, capitation, episode-based and bundled)
• Supplementary payment (shared savings, pay for performance, retainer-based)
• Combined payment (medical homes and accountable care organizations).

Key findings of the study reveal that many physicians and other healthcare providers find it difficult to keep up with the changing payment models. The models are increasingly complex and physician practices are increasingly risk-averse. Specifically, the study’s key findings are:

• Payment models are changing at an accelerating pace: Physician practices, health systems, and consultants find it difficult to keep up with the proliferation of new models, with some calling for a “time out” to allow them to better adapt to current APMs.
• Payment models are increasing in complexity: Alternative payment models have become increasingly complex since 2014. Practices that have invested in understanding complex APMs have found opportunities to earn financial awards for their preexisting quality — without materially changing patient care.
• Risk aversion is more prominent among physician practices: Risk aversion among physician practices was more prominent. Risk-averse practices sought to avoid downside risk or to off-load downside risk to partners (e.g., hospitals and device manufacturers) when possible.

The new study recommends that payment models be simplified for better understanding and for improved patient care. Value-based programs that focus on the quality of healthcare have become too complex and change too often for many independent physicians to be able to realize true and timely financial rewards.

The study also recommends incorporating physician feedback into the APM process. APMs should be designed according to what those physicians see as valuable, including positive financial incentives rather than those designed around risk. In addition, the report recommends that the pace of any changes should be slowed to allow independent physicians to gain a clearer understanding and participate.