Movement away from fee-for-service reimbursements has begun


René Letourneau
René Letourneau

Among health plan executives, there’s a lot of talk about moving from volume to value. But identifying what this expression means in practice can be challenging because health plans all define value differently and they are developing ways to deliver more value to their employer and consumer customers.

In fact, the movement to value-based payment is so challenging that while hospitals, physicians, and other providers understand the need to move away from fee-for-service, many are unsure of how to do it, are unable to do it, or are trying to figure out how best to do it, according to a recent article in MedPage Today.

Despite the challenges, some payers and providers are in fact shifting away from volume-based payments, commonly known as fee for service, and adopting value-based payment methods, as René Letourneau, a senior finance editor with HealthLeaders Media, reported in a recent cover story, Restructuring Reimbursements. She found, for example, that a group of hospitals contracting with a health plan had agreed to have 15 percent of their income based on patient outcomes.

As the health plan executive explained, “If you want to change behaviors, you’ve got to change incentives.” Letourneau explained that the risk of not being paid 15 percent of their contracted reimbursement rates if they do not meet certain outcome measures appears to be motivating hospitals to find ways to deliver better care. Here’s Letourneau’s explanation of how she reported this story.

Creative Commons License

Republish our articles for free, online or in print, under a Creative Commons license.

Joseph Burns

Joseph Burns is AHCJ’s health beat leader for health policy. He’s an independent journalist based in Brewster, Mass., who has covered health care, health policy and the business of care since 1991.