Value-Based Payments: The Case for Moving Away From Fee-For-Service as COVID-19 Strains Hospitals’ Revenue

The transition to value is not for every CEO  

COVID-19 has put tremendous strain on so many health care enterprises, from solo primary care physicians to large multi-state systems, that are now planning how to claw their way back out with state economies re-opening.  

“Persuading a lot of people right now that taking on risk is a good thing … that’s an uphill battle,” Dentzer said. “How do we instill greater confidence that moving forward on value-based payments really is the way to go?”  

Boehler answered that direct contracting was on the CMS models that had a positive response and organizations were applying in February and March, until COVID-19 essentially forced everyone to move those to the back burner. The initial response to the Next generation ACO Model, meanwhile, was 2-3 times what he expected.  

“Now that the floor just dropped, if I’m the CEO of a health system, do I believe that FFS revenue is going to come back like before?” Boehler asked. “If that answer is yes, then stick with what you have. But if the answer is no, and elective care will be down 10-20 percent, value-based care is a way to move to a baseline that’s above and beyond where you were.”