Hospital Revenue Not Slowed By Value-Based Care Efforts
By Christine Kern, contributing writer
Report shows physicians generated $1.56 million in direct net income for hospitals.
According to FierceHealthFinance, CMS has begun the push to transition to value-based care payment models for hospitals and healthcare providers under Medicare as part of its plan to overhaul the U.S. healthcare system. Now, Merritt Hawkins analysis shows that, despite these efforts, physicians are bringing in more net income for hospitals than any time in the recent past, generating on average $1.56 million per doctor in direct net inpatient and outpatient income. This marks an 8 percent increase from $1.44 million in 2013, according to Forbes.
“The value of physician care is not only related to excellence in patient outcomes and patient experience,” Merritt Hawkins President Mark Smith said. “Physicians also drive the financial success of hospitals, even in a health care system that is evolving away from volume-based payments and toward value-based payments.”
The market shift toward value-based care (VBC) represents unprecedented opportunities and challenges for the U.S. healthcare system as largely untested models enter the industry. Instead of rewarding volume, new value-based payment models reward better results in terms of cost, quality, and outcome measures, according to Deloitte.
The study’s findings show the shift away from fee-for-service medicine to population health and boosting general health is progressing slowly. “We are doing a better job with value-based care, bundled payment, medical homes or whatever model is in use, but the demand for healthcare services and utilization is up across the country,” Travis Singleton, senior vice president of Merritt Hawkins told Forbes. “The volume is just a level that we have never seen.”
The survey polled hospital chief financial officers regarding the amount of revenue physicians in 18 specialties generated for their hospitals in the previous 12 months, including both net inpatient and outpatient revenue derived from patient referrals, tests, prescriptions, and procedures performed or ordered in the hospital.
One sign value-based care is working is the study found that, while specialists are still generating more revenue to hospitals, net primary care doctors are generating less revenue for hospitals than three years ago. One reason for this is in population health and value-based care models, primary care doctors are treating patients in outpatient settings, ensuring delivery of medications, checkups, and necessary outreach to stay healthy and avoid the hospital.