Fee-for-service model continues reign

The commercially insured market continues to be dominated by the fee-for-service payment model, data from the Catalyst for Payment Reform report reveals.

According to the data, approximately 90 percent of all payments put forth by physicians and hospitals in the private sector have been characterized as pay-for-service. Derived from the results of the National Scorecard on Payment Reform, the current statistics find that a mere 11 percent of payments made back to physicians and hospitals were value-oriented, in that they were linked to healthcare outcomes or the care performance of the provider. Furthermore, of that 11 percent, only 43 percent of payments delivered were accompanied by a financial incentive or bonus sum for the delivery of high-quality care. 

The remaining 57 percent of value-based payments were dependent upon bundled payments or other brands of payment modalities that challenged physicians and providers financially if their performance failed to live up to quality and cost goals.  

“Catalyst for Payment Reform has set a target of 20 percent of payments being value-oriented by 2020,” states the National Scorecard. “How are we doing in 2013? The results of the first annual Scorecard are in and 10.9 percent of all commercial in-network payments are value-oriented – either tied to performance or designed to cut waste. Traditional fee-for-service, bundled, capitated and partially capitated payments without quality incentives make up the remaining 89.1 percent. Progress toward value-oriented payment is evident, but much more needs to be done.”

The scorecard was funded and made possible by the Commonwealth Fund and the California HealthCare Foundation.

View the interactive scorecard here.