Technology Holding Back Dumping Fee-for-Service

Private health insurers want to dump fee-for-service payments systems. The only thing holding them back is the lack of technology in exchanging information with doctors.

According to a Porter Research survey reported in the American Medical News (AMN) on May 27, 2013, 20% of health plans said at least half their business was “supported” by value-based payment models at the end of 2012. In three years, 45% of plans expect half their business to be supported by value-based payments. In five years, that number is expected to be 59%.

The survey was done on behalf of Availity, a health information network in Jacksonville, Florida, and included 39 insurers.

AMN reported that the survey found that 82% of health plans consider the development of new payment models a “major priority” for their organizations. Health insurers generally are making the biggest effort to convert from fee-for-service to value-based payments in their employer group plans, with 75% saying they were doing so. By comparison, 54% said Medicare plans were a priority for this transition, 46% said Medicaid plans were, and 44% named individual plans. Respondents could choose more than one answer.

Quality Versus Quantity

“The findings mirror other studies and discussions that have taken place in the wake of the Affordable Care Act and other reforms. Payers and others in the health industry view value-based payment models as a way to improve care and control costs by rewarding doctors for quality rather than the number of procedures performed or patients seen. Insurers have implemented pay-for-performance plans and joined doctors and hospitals in accountable care organizations to make the conversion from straight fee for service, ” noted the AMN article.

Automatic Information Exchanges

Technology was cited by the health plans as essential as they move to value-based payments. Ninety percent of insurers said automating information exchange is critical to the success of moving to such payments.

Less than 50% of insurers currently have real-time automation capabilities between themselves and doctors, and 90% said they use computers and paper for information exchanges.

The study, according to AMN, did not detail whether plans believed the lack of technology was because of problems on their end, or a result of many physicians just beginning to adopt electronic health records under the federal meaningful use program, or a combination of the two.

However, 75% of plans said they will automate information exchange with doctors in the next 12 to 18 months so they can begin to implement or expand value-based payment models.