Several factors are hindering the move from volume to value, particularly for smaller hospitals and health systems, according to an EY survey of more than 700 healthcare professionals, including CMOs, CFOs and clinical quality executives.
Smaller healthcare organizations, with revenue between $100 million and $500 million, appear to be the furthest behind in value-based care transformation, with 67 percent reporting no value-based reimbursement initiatives in place at their organizations. A majority of those with revenue between $500 million and $1 billion (61 percent) also reported no value-based reimbursement initiatives. Comparatively, just 8 percent of organizations with $5 billion in revenue have no value-based reimbursement initiatives, according to the survey.
"It is insightful that among hospitals and health systems with revenues of less than $1 billion, few have embraced strategies or made progress toward value-driven care," Yele Aluko, MD, executive director in the Advisory Health practice at EY, former hospital system physician-executive and co-author of the report, said in a statement. "This creates a competitive disadvantage for smaller hospitals, and quite frankly, puts their financial futures, sustainability and corporate existence in jeopardy."
However, organizations across the board are facing challenges in the transition. The survey shows 95 percent of respondents have implemented cost control measures, but 25 percent do not have any value-based initiatives planned for this year — indicating a gap exists between efforts to improve cost and value.
EY identified the following four factors as pain points in the industrywide shift from volume to value.
1. Increasing costs of care due to inefficiency. Lack of integration across health systems and the fee-for-service contract structure has led to inefficiencies and wasteful spending, EY notes.
2. Workforce challenges. Finding, retaining and engaging staff is an ongoing challenge — only 12 percent of respondents said clinical ancillary staff was highly engaged and 8 percent said administrative staff was highly engaged. This can erode the patient experience and lead to burnout for nurses and physicians, who respondents ranked as highly engaged.
3. Lack of standards to measure and define quality. Providers do not consistently measure outcomes and quality, and sometimes do not measure them at all, according to EY. These practices have led to inconsistencies and can put patients at risk for medical errors, according to the report. Fifty-eight percent of respondents have initiatives underway to reduce medical errors and 18 percent have patient safety initiatives planned for this year.
4. Poor working relationship between providers, payers and regulators. Payers and providers are struggling to meet cost and outcomes demands in the current environment while structuring contracts to progress toward a value-based future.
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