Value-Based Pay Slowly Hits Doctor Wallets

Doctors are seeing more payments from value-based care contracts, but fee-for-service medicine that pays physicians based on volume is still dominant, new data shows.

Nearly one-third, or 32%, of physicians were offered a production bonus based entirely or in part on “value-based” metrics last year compared to 23% the prior year, according to physician staffing firm Merritt Hawkins. Meanwhile, 6% of total compensation is tied to quality or value-based metrics, compared to less than 5% in 2015.

The increase in value-based reimbursement comes as health insurers and government health programs including Medicare under the Affordable Care Act emphasize lower-cost outpatient care to curb rising costs. Insurers tend to dangle more financial carrots before primary care doctors to improve outcomes, increase quality and keep patients away from hospital care and more expensive specialists.

“We are moving in the direction of value-based compensation, but the reality just doesn’t match that aspiration yet,” said Travis Singleton, Merritt Hawkins senior vice president, said in an interview.

The Medicare health insurance program for elderly Americans has committed to shifting half its dollars away from fee-for-service medicine by 2018. For doctors, this means it’s only a matter of time before a much larger percentage of what they are paid will be tied performance, health outcomes and various value-based measures pushed by insurers. “It’s getting closer to them,” Singleton said.

The Medical Group Management Association says nearly 11% of primary care doctor compensation was tied to quality in 2014 compared to less than 7% in 2013. MGMA plans to update its report this summer but its executives have said the trend is for more value-based payment.

Though the vehicle that will be paid by insurers may vary from an accountable care organization (ACO) to a medical home that includes doctors, health plans are working with the government to shift to these new models that emphasize population health and care coordination. Aetna , UnitedHealth Group , Anthem and other Blue Cross and Blue Shield plans are moving even faster toward value-based payment than Medicare.

“We remain on track to achieve our 2020 goal of 75% of claims in value-based care models,” Aetna CEO Mark Bertolini told analysts on the company’s first-quarter earnings call.