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Pulse Magazine

Pulse Magazine

Care Quality: Is Value-Based Care Working?

Value-based care, the model that bases payments on quality of care, is starting to reduce medical costs and improve patient services, according to a recent survey from Change Healthcare conducted by ORC International.  In fact, the results show value-based care is accomplishing the “triple aim” sought after in the industry, meaning providing better care for consumers, improving population health management plans and lowering health care expenses.

According to “Finding the Value: The State of Value-Based Care in 2018,” the model is reducing unnecessary medical costs 5.6 percent on average while improving care and patient engagement.  Nearly 25 percent of respondents said their savings exceed 7.5 percent.  

“Despite easing or ending of federal mandates, commercial lines of business are investing in value-based innovation, accelerating the decline of pure fee-for service faster than previously projected levels. Indeed, today nearly two-thirds of payments are now based on value,” according to a news release on the survey from Change Healthcare (

The survey includes 120 payers such as Managed Medicare and Managed Medicaid across multiple regions and organization sizes.  “Payers are finding the positive impact of value-based care as they scale these models—particularly episodes of care—and that’s starting to bend the cost curve in a significant way,” Carolyn Wukitch, senior vice president and general manager, Network and Financial Management, Change Healthcare, said in the news release. 

“However, the demand to innovate at the pace of change is challenging payers. They lack satisfactory analytics and automation to better engage providers, operationalize their models and assess effectiveness overall.”  Additional findings from the survey include:

Nearly 80 percent of payers say they’ve experienced improvements in care quality, while 64 percent report improvements in provider relationships and 73 percent report better patient engagement.

The fee-for-service model is fading at a faster rate than predicted in previous studies, now representing just 37.2 percent of reimbursement, and projected to drop below 26 percent by 2021.

More than half of payers surveyed, however, “are not very satisfied with their current value-based analytics, automation and reporting capabilities—despite the fact that many of these are designed and developed in-house.”

Visit to access the complete research report, Finding the Value: The State of Value-Based Reimbursement in 2018. Examples of value-based care models for health care providers are available from the Centers for Medicare and Medicaid Services (


Research Shows Growth in Health Care Prices

The prices for a range of health care services are growing more rapidly than economic inflation in the U.S., according to new research published by the Kaiser Family Foundation (KFF).  The research focuses on trends in health care prices, use of services and health care spending in the U.S. versus other similar countries.

Consumers with private insurance experience particularly high increases in costs for services. The KFF also finds that there is “significant geographic variation in prices.”  “For example, the average price of a full knee replacement for those in large employer plans increased from $19,595 in 2003 to $34,063 in 2016, growth of 74 percent compared to a 28 percent increase in general inflation,” it reports.

In New York City, the average cost of the same knee replacement is more than double the cost in the Louisville, Ky., area.  Overall, private insurance prices for inpatient hospital services are significantly more than what is paid by Medicare and Medicaid, and the gap is increasing over time, according to the KFF.

Compared to other countries, the KFF finds that the prices in the U.S. are higher for health care and prescription medications, but use of services, such as physician visits, is lower.  And, the average health care spending per person in other comparable countries is half as much. In the U.S. the average health expenditures per person in 2016 was $10,348, compared to $7,919 in Switzerland and $5,551 in Germany.

The U.S. spent 18 percent of its GDP on health care in 2016, compared to 12 percent in Switzerland.  More information:

Paper Billing Remains Prominent Among Health Care Providers; Price Transparency Improves


In a Waystar and HIMSS Analytics study of patients who visited a health care provider in the last year, new trends in price transparency and payments were revealed.  In particular, a majority of providers continue to issue paper statements, and cost estimates at time of service reflect improvement in price transparency, according to a news release on the Patient Payment Checkup Survey.

“Our second annual survey reveals that the health care industry is at a tipping point. Patients want to understand their health care expenses given how much they pay out of pocket,” Matthew Hawkins, CEO of Waystar a provider of revenue cycle technologies, said in the news release.  “At the same time, providers are looking for ways to increase patient satisfaction and simplify their revenue cycles.”

Key findings from the survey, including over 1,000 patients and approximately 900 financial executives in the health care industry, are: Nearly 100 percent of health care executives report that they bill patients using paper statements, however over half of patients said they would prefer to receive and pay their medical bills electronically.

Eighty-five percent of patients responding to the survey felt the same responsibility to pay for health care as they do other services, however less than 20 percent who have commercial insurance plans found it “easy to understand and convenient to pay for” health care costs.  Waystar also finds that cost estimates from their health provider help patients comprehend what they owe. Eighty-six percent of patients who received cost estimates report they understood their payment responsibility, which ultimately helps with faster and easier payment for providers.

However, less than one-third of patients surveyed said they know to ask for a cost estimate at their healthcare provider’s office while 87 percent of health care professionals participating in the survey say that they are able to offer their patients a cost estimate upon request.  “The survey indicates a significant difference between patients and their provider organizations in terms of perceived payment timeliness,” Waystar reports. 

Nearly half (48 percent) of providers said that it takes their patients over three months to pay the full balance of their bill, versus only 24 percent of patients thinking that it takes them longer than three months to pay their balance. “This perception gap may lie in the timing of payer reimbursement.  Patients may believe that they do not owe anything until their payers pay their share,” according to Waystar.

“Our survey reveals that patient consumerism is advancing quickly as organizations adopt advanced payment technology,” Hawkins concludes. “Patients have a higher expectation than they used to have.  It is important that lagging health care organizations improve their patient billing and payment methods faster to remain competitive. 

Patients are already seeking health care from providers whom they trust with both their health and their pocketbooks.  Providers who don’t provide transparency and convenience will be left behind.”

More information:


Cyber Liability Insurance 101: Will it Help Agencies and Providers Combat Data Security Threats?

Data security risks are not going away in the health care sector and while strategies such as employee training and a strong data breach response system help, a new option to protect your business is emerging: cyber liability insurance.

Health care cybersecurity spending is predicted to grow to $65 billion between 2017 and 2021, according to the Experian 2018 Data Breach Industry Forecast.  Experian also reports health care organizations will be the most targeted industry this year as new and sophisticated attacks are on the horizon.

The U.S. Department of Health and Human Services (HHS), media or state attorneys general received 233 breach industry reports from January to June 2017.  “For the 193 attacks for which there are numbers, 3,159,236 patient records were affected,” according to Experian.  

Providers are increasingly purchasing cyber liability insurance policies to ensure financial protections and resources to work through data breaches and maintain their reputation are in place, Becker’s Hospital Review Content/Strategist Editor Brooke Murphy reports in the white paper “Can Health Care Providers Afford Not to Have Cyber Insurance in 2018?”

“As cyber threats become the reality, and as [insurance] carriers have identified how significant and complex online exposure is, cyber liability policies have become more refined and more necessary,” James Fasone, senior vice president and national health care practice leader for Key Insurance & Benefits Services said in the white paper.

Purchasing cyber liability insurance may ultimately be more affordable than the costs to providers after a data breach occurs, from attorney’s fees to purchasing credit monitoring systems for affected consumers, according to the white paper. That’s not to mention the costs from any disruptions to providers’ business and as a result of time spent notifying patients.

And, even if providers spend money on the front end to protect their company and data from a cyber-attack, cyber criminals continue to find their way around firewalls and security systems.  And, remember, the strongest security protections can still be put at risk by human error if not used properly.

Employees continue to present a big risk to companies, according to Experian.  Regular training and a refresh of your data security policies are critical to staying ahead of threats and risks to sensitive information and data.  It’s also helpful to limit the number of employees who have access to sensitive data, especially on mobile and portable devices. Make sure you have a strict policy for access and transport of mobile and portable devices containing sensitive information.

“Cyber liability insurance helps hospitals cover the costs of a data security breach for things like identity protection solutions, public relations, legal fees, liability and more due to loss, theft and unauthorized disclosure of data,” according to Becker’s Hospital Review.  

When considering if cyber liability insurance is right for your business, and the level of insurance that is the best fit, it comes down to matching coverage with your “business objectives, asset vulnerability, third-party risk exposure and other external factors,” Murphy reports. 

“The cyber insurance industry in the last three to five years has rapidly evolved to meet the needs of health care businesses in a digital world,” Fasone said in the white paper. “That means there are many more companies in the market offering a greater variety of coverage.”

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