Finance departments at healthcare providers need to adjust to new payment models, but only 15 percent say they have the "very sophisticated" capabilities to support capitation, bundled payments and quality-based payments that account for an increasingly larger component of revenue, according to a survey by KPMG, the U.S.-based audit, tax and advisory firm.
KPMG conducted the survey of 164 individuals, who identified themselves as being associated with healthcare providers during a May 13 webcast, which was titled Alternative Payment Arrangements – Implications for the Finance Function.
Here are six findings from the survey, according to KPMG.
1. Sixty-one percent of respondents said their finance departments are gathering tools and conducting analysis about getting their finance function ready for new payment models.
2. Thirteen percent of respondents described their finance function as "undeveloped" for managing risk and accounting for these new payment mechanisms.
3. Many healthcare providers are well aware of the challenges of adapting to value-based payments, the survey found. Only 4 percent of provider organizations view their senior management as uninvolved in addressing alternate payment arrangements.
4. When asked how CMS' objectives of linking 90 percent of reimbursements to value or quality-based measures by fiscal year 2018 influenced their organization the most, only 26 percent of those surveyed said their strategic approach to migrating and preparing for value-based payments has not changed.
5. Twenty percent percent of survey respondents said they are measuring risk and accounting for it in their fees and another 23 percent are using data and analytics to measure and improve efficiency and quality. Other respondents said they are revamping finance/accounting functions or updating their contracts.
6. As far as the needs of finance departments at healthcare providers, predictive modeling (30 percent) and analytic tools (27 percent) were where organizations needed the most help, surpassing organizational culture, measuring clinical variability, showing the connection between quality and incentives and improving reporting transparency to stakeholders.
"It has never been more crucial for providers to prepare their finance departments to address the demands that new care delivery models, such as accountable care organizations and alternative payment arrangements, will present as the industry moves away from fee-for-service reimbursement mechanisms," Joe Kuehn, an advisory partner at KPMG's Healthcare & Life Sciences Practice, said in a news release. "Medicare, Medicaid and commercial health plans are all pushing toward paying hospitals and physicians for value, effectively pushing financial risk upon the providers. Finance departments will need to prepare to manage these challenges and have better systems to measure performance against established targets including the cost and quality of care for example, so they can manage in this new environment."
More articles on healthcare finance:
For-profit hospital stock report: Week of June 22-26
Moody’s affirms Sarasota County Hospital District’s bond rating: 3 things to know
5 most-read finance stories: Week of June 22-26