Poll: Value-Based Care Hurting Revenues

According to a survey conducted by consulting firm KPMG LLP, healthcare industry managers and executives are expecting profits to be hurt from the introduction of value-based contracting.


According to a survey conducted by consulting firm KPMG LLP, healthcare industry managers and executives are expecting profits to be hurt from the introduction of value-based contracting.

The KPMG survey, which polled 240 representatives from hospitals, physician practices, health plans and pharmaceutical companies, found that approximately one-third (33 percent) of healthcare managers said they expect value-based contracts to dampen operating results. In fact, more than 12 percent of the respondents expect operating income to fall 10 percent or greater from these agreements.

Respondents from hospitals, health systems and large physician groups appear especially pessimistic about the impact of value-based contracts, with 49 percent expecting lower operating profits.

Nearly a third of executives and managers (31 percent) expect clinical information technology to have the biggest impact on the quality of care and patient outcomes, coming out ahead of financial performance (15 percent), clinical operations (13 percent) and patient engagement (7 percent), among other factors. Regarding the potential payoff for investing in more sophisticated clinical information systems, 33 percent expect cost reductions of 5-10 percent from more effective use of clinical data, while 18 percent see a 10-15 percent and another 17 percent see greater than 15 percent cost improvements.

Despite this optimism about the benefits, only 19 percent of those surveyed said their organizations are already delivering results based on their information management capabilities. Nearly 28 percent said they are currently implementing the capabilities, while 23 percent are in the planning stages. About 8 percent said they do not have a plan.

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