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You are here: Home / Links / Transitioning Payment Models: Fee-for-Service to Value-Based Care

Transitioning Payment Models: Fee-for-Service to Value-Based Care

In a survey of the NEJM Catalyst Insights Council in July 2018, 42% of respondents say they think value-based reimbursement models will be the primary revenue model for U.S. health care. Indeed, this transition is already happening. Respondents report that a quarter of reimbursement at their organizations is based on value, on average. While three-quarters of their revenue remains fee-for-service, we see a remarkable change to a reimbursement system that was static for decades.

In particular, survey respondents’ organizations are pursuing two value-based strategies: accountable care organizations, which often use capitated payments; and bundled payments, which provide single payments for multiple services addressing a single condition.

Nearly half (46%) of respondents – who are clinical leaders, clinicians, and executives at U.S.-based organizations that deliver health care – say value-based contracts significantly improve the quality of care, and another 42% say value-based contracts significantly lower the cost of care. While this data suggests considerable support for value-based reimbursement, it is worth mentioning that a significant number (36%) of respondents say they are uncertain that this will ever become the primary revenue model for U.S. health care, indicating that for many, the jury is still out.

Click here to read the full white paper from NEJM Catalyst.



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