Use of alternative payment models up 23% over 5 years, report finds

About 41 percent of U.S. healthcare dollars involve alternative payment models — a 23 percent increase over five years, according to a report from the Health Care Payment Learning & Action Network.

The report, which is backed by America's Health Insurance Plans and the Blue Cross Blue Shield Association, surveyed 79 payers, which cover 80.2 percent of the insured U.S. population. Its focus is tracking the adoption of APMs.

Seven takeaways:

1. About 41 percent of healthcare dollars were classified as Category 3 or 4, which includes shared savings, shared risk, bundled payment and other APMs, according to the report's overview. The Health Care Payment Learning & Action Network set a goal to reach 50 percent of healthcare dollars moving through APMs by 2018. 

2. Category 3 and 4 payments beat out the percentage of dollars spent on the traditional fee-for-service model (39.3 percent) and the pay-for-performance model (19.8 percent). 

3. APMs were predominant among Medicare Advantage plans (58 percent), followed by traditional Medicare (42.8 percent), commercial (35.5 percent) and Medicaid (35.4 percent) plans, according to the report. 

4. However, the percentage of APMs that included two-sided financial risk varied. About half (29.3 percent total) of Medicare Advantage dollars involved a two-sided APM.

5. Eighty-seven percent of payers anticipate APM activity will increase, according to the report, while 12 percent think it will remain the same. Of categories most expected to grow, 47 percent pointed to 3B, a model that allows payers to share a portion of their savings with members if they hit cost, quality and/or utilization targets. 

6. The majority of payers agreed that APMs result in improved care coordination (93 percent), higher quality of care (92 percent) and more affordable care (85 percent). 7. Surveyed payers said the top barriers to employing an APM was hesitancy from providers to take a financial risk, providers lacking the ability to operationalize and little provider interest or readiness. 

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