Welcome!

News Feed Item

Gap Separates Payers and Physicians on Value-Based Arrangements, According to a New Study Released by FTI Consulting

As Both Sides Prepare for New Forms of Payment, Many Physicians Resist Due to Lack of Trust in Insurers

WASHINGTON, July 30, 2014 /PRNewswire/ -- FTI Consulting, Inc. (NYSE: FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, today announced the results of a new study of healthcare payers and providers that suggests a stumbling-block in the transition to the new and much-heralded value-based relationships between them. 

The Gap between Doctors and Insurers

According to the study, 41 percent of primary care physicians, who are not currently in a value-based relationship, say their biggest obstacle before agreeing to enter into one is their distrust of payers. The study also found that only 16 percent of all physicians surveyed were willing to accept the financial risk – a key element of many value-based relationships sought by insurers.

"As today's healthcare environment continues to evolve, both payers and providers will need to cooperate to address the critical challenges facing the industry," said Kenneth Barker, Senior Managing Director and Global Leader of the Health Solutions practice at FTI Consulting. "The business arrangements between both parties must align with interests and incentives. This study indicates payers and physicians still have a ways to go to reach that goal." 

"This lack of trust will be a huge hurdle for payers to overcome as they often cite provider buy-in and engagement as critical to the success of any value-based arrangement," said Dr. Phil Polakoff, M.D., Senior Managing Director and Chief Medical Executive of the Health Solutions practice at FTI Consulting. "The two groups are still significantly distant in attitudes towards value-based arrangements – a difference that can stand in the way of creating new forms of payment."

Since the 2010 Affordable Care Act ("ACA"), healthcare payers and providers, both in concert and independently, have been preparing for value-based reimbursement programs in which meeting quality-of-care and cost-reduction targets would result in benefits for both groups and the nation as a whole. This has manifested itself in the growth of Accountable Care Organizations ("ACOs"), bundled arrangements and new relationships that have blurred the lines between insurers and providers.  

In bundled payments and other value-based arrangements, many experts believe it is essential that payers and providers eventually share risks to control costs and improve quality. However, the study found that the gap between them continues to widen. Payers believe that a mere five percent of providers are willing to accept the downside risks necessary for value-based arrangements to work.

Risk-sharing is not the only perceptual disconnect between payers and providers. Payers seeking to partner with providers in value-based arrangements have identified capabilities they wish potential partners would possess. Payers want to see providers invest in Healthcare IT ("HIT"), especially in software and systems supporting clinical integration and Population Health Management ("PHM"). Eighty percent of payers say they would be likely to contract with a clinically-integrated hospital and provider system. However, only 50 percent of healthcare providers report that their organizations have implemented new technology or software to support PHM and value-based reimbursement, 32 percent have not, and 18 percent either "don't know" or are "unsure".

Most payers and providers are taking steps to prepare for the value-based arrangements incentivized by the ACA. Eighty percent of payers in the survey say these types of contracts are "very important" to their strategic objectives, and 92 percent of providers say they are either "somewhat" or "very important" to them. However, the traditional fee-for-service contract still predominates in the healthcare industry. Fifty-five percent of payers say that many of their commercial contracts remain fee-for-service, and only 10 percent report that they no longer have any fee-for-service contracts. At the same time, 15 percent of polled providers say they are "only interested" in the fee-for-service reimbursement model, which the American Public Health Association has said directly leads to "overtreatment and overbilling".

"Despite their disagreements, payers and providers overwhelmingly recognize the importance of value-based arrangements to promote their broader strategic objectives," said Ed Harnaga, Senior Managing Director and Americas Head of the Strategic Communications segment's Healthcare & Life Sciences industry team. "Overcoming the trust deficit will require both parties to work together on sharing risks, communicating effectively, building capabilities and investing in technologies to move the industry forward."

The full survey findings from FTI Consulting will be released in the September 2014 online edition of the FTI Journal. More insights from the FTI Consulting Healthcare & Life Sciences industry team can be accessed at www.fticonsulting.com/hcls.

Methodology

FTI Consulting conducted an online survey of U.S.-based healthcare providers that was fielded between June 23, 2014 and June 25, 2014. A total of 251 providers specializing in general practice, internal medicine and family medicine participated in the survey. FTI Consulting also conducted in-depth telephone interviews with 20 different U.S. payers between April 14, 2014 and April 18, 2014. A cross-section of payers from both for-profit and non-profit institutions, as well as from regional, national and Blues organizations were included in the sample. Participants were director-level or above in managed care organizations.

About FTI Consulting

FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 4,200 employees located in 26 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The Company generated $1.65 billion in revenues during fiscal year 2013. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.

FTI Consulting, Inc.
1101 K Street NW
Washington, DC 20005
+1.202.312.9100

Investor Contact:
Mollie Hawkes
+1.617.747.1791
[email protected]

Media Contact:
Peter Kerr
+1.212.850.5726
[email protected]

Photo - http://photos.prnewswire.com/prnh/20140729/130929

SOURCE FTI Consulting

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...
SYS-CON Events announced today that Enzu will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive ad...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
SYS-CON Events announced today that Interoute has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Interoute is the owner operator of Europe's largest network and a global cloud services platform, which encompasses over 70,000 km of lit fiber, 15 data centers, 17 virtual data centers and 33 colocation centers, with connections to 195 additional partner data centers. Our full-service Unifie...
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs oft...
SYS-CON Events announced today that Carbonite will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Carbonite protects your entire IT footprint with the right level of protection for each workload, ensuring lower costs and dependable solutions with DoubleTake and Evault.
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
When NSA's digital armory was leaked, it was only a matter of time before the code was morphed into a ransom seeking worm. This talk, designed for C-level attendees, demonstrates a Live Hack of a virtual environment to show the ease in which any average user can leverage these tools and infiltrate their network environment. This session will include an overview of the Shadbrokers NSA leak situation.
Cloud-based disaster recovery is critical to any production environment and is a high priority for many enterprise organizations today. Nearly 40% of organizations have had to execute their BCDR plan due to a service disruption in the past two years. Zerto on IBM Cloud offer VMware and Microsoft customers simple, automated recovery of on-premise VMware and Microsoft workloads to IBM Cloud data centers.
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs ofte...
Most DevOps journeys involve several phases of maturity. Research shows that the inflection point where organizations begin to see maximum value is when they implement tight integration deploying their code to their infrastructure. Success at this level is the last barrier to at-will deployment. Storage, for instance, is more capable than where we read and write data. In his session at @DevOpsSummit at 20th Cloud Expo, Josh Atwell, a Developer Advocate for NetApp, will discuss the role and valu...
SYS-CON Events announced today that Cloud Academy will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloud Academy is the industry’s most innovative, vendor-neutral cloud technology training platform. Cloud Academy provides continuous learning solutions for individuals and enterprise teams for Amazon Web Services, Microsoft Azure, Google Cloud Platform, and the most popular cloud computing technologies. Ge...
As cloud adoption continues to transform business, today's global enterprises are challenged with managing a growing amount of information living outside of the data center. The rapid adoption of IoT and increasingly mobile workforce are exacerbating the problem. Ensuring secure data sharing and efficient backup poses capacity and bandwidth considerations as well as policy and regulatory compliance issues.