A recent survey conducted by Avalere found that over half of the payers had at least one outcomes-based contract in 2022. The survey also found that oncology, cardiology, and endocrinology were the most common therapeutic areas where payers entered outcomes-based contracts. Furthermore, payers like contracts that include both clinical and claims-based outcomes, indicating that payers are seeking a thorough method of monitoring results. The popularity of outcomes-based contracts shows that they are becoming into industry standard practice, necessitating a greater understanding of the concept and readiness on the side of providers to take part.
The healthcare industry is in the midst of a shift towards value-based care, where payment is linked to the quality of care provided rather than the volume of services delivered. One aspect of this shift is the use of outcomes-based contracts, which tie payment to the achievement of specific outcomes or measures. According to a recent survey conducted by Avalere, over half of the payers had at least one outcomes-based contract in 2022. This article will explore the findings of the survey and what they mean for the future of value-based care.
Survey Methodology:
Avalere’s survey was conducted in April 2022 and included responses from 46 health plans. The survey asked payers about their use of and attitudes toward value-based contracts, including outcomes-based contracts. The results provide insight into the prevalence of outcomes-based contracts in the industry and the therapeutic areas where they are most commonly used.
Survey Findings:
The survey found that 58 percent of payers had at least one outcomes-based contract in 2022. This indicates that outcomes-based contracts are becoming increasingly common in the healthcare industry. Additionally, 35 percent of payers surveyed had more than 10 outcomes-based contracts. This suggests that some payers are making a significant investment in outcomes-based contracts.
According to a poll of payers, 15% are negotiating or preparing to sign outcomes-based contracts. This demonstrates that outcomes-based contracts are not only becoming more typical but are also expected to become more prevalent in the upcoming years.
The survey also found that oncology, cardiology, and endocrinology were the most common therapeutic areas where payers entered outcomes-based contracts. This is not surprising, as these areas are associated with high costs and significant variation in outcomes. Outcomes-based contracts can help payers manage costs while incentivizing providers to deliver high-quality care.
Another survey finding was that around three in four payers with outcomes-based contracts said they prefer contracts that include both claims-based and clinical-based outcomes. This suggests that payers are looking for a comprehensive approach to measuring results, which incorporates measurements that are both objective and subjective.
Implications for the Future:
The results of Avalere’s survey have several implications for the future of value-based care. First, the prevalence of outcomes-based contracts suggests that they are becoming standard practice in the industry. As more payers adopt outcomes-based contracts, providers will need to become more familiar with the concept and be prepared to participate in them.
Second, the fact that some payers have more than 10 outcomes-based contracts indicates that outcomes-based contracts can effectively manage costs and improve quality. However, outcomes-based contracts require significant investment and resources to implement, which may be a barrier to adoption for some payers.
Third, the finding that oncology, cardiology, and endocrinology were the most common therapeutic areas where outcomes-based contracts were used suggests that payers are focusing on high-cost areas where outcomes can vary significantly. This trend is likely to continue as payers look for ways to manage costs and improve quality.
Finally, the preference for contracts that include both claims-based and clinical-based outcomes suggests that payers are looking for a comprehensive approach to measuring results. This is an important consideration for providers who are participating in outcomes-based contracts, as they will need to be able to track both objective and subjective measures of quality.
