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A Third of Practice Managers Surveyed Expect Value-based Contracts to Hurt Bottom Line

Tony Berberabe, MPH @OncBiz_Wiz
Published: Thursday, Jun 19, 2014

A third of practice managers and health care executives who participated in a survey about value-based contracts said they expected the agreements to hurt the bottom line of their institution or practice, according to KPMG, an audit, tax, and advisory company. More than 12% of respondents expect operating income to fall 10% or more based on these agreements. The survey consisted of 240 representatives from hospitals, physician practices, health plans, and pharmaceutical companies.

According to 28% of respondents, the most significant care delivery change resulting from the use of value-based contracts will be greater use of disease management, which places a greater emphasis on helping patients manage chronic illnesses such as diabetes and cardiovascular disease. In addition, 19% of respondents expect a greater reliance on nurse practitioners and physician assistants.

"The Affordable Care Act, as well as general market conditions are forcing providers and managed care companies to respond to the need for greater efficiency, access to appropriate sites of services, and quality of services provided in health care. Some of these changes will come from rethinking patient care delivery, but technology and advanced clinical information systems are a large part of making this overhaul sustainable, as well," Joseph Kuehn, a partner at KPMG's healthcare advisory practice, said in a news release.

The survey also revealed that nearly one-third of respondents expect clinical information technology will have the biggest impact on the quality of care and patient outcomes, even more so than financial performance (15% of respondents), clinical operations (13% of respondents), and patient engagement (7% of respondents).

The return on investing in more sophisticated clinical information systems will have a modest effect, with 33% expecting cost reductions ranging from 5%-10% from more effective use of clinical data, while 18% of respondents see a 10%-15% reduction. Seventeen percent of respondents see a greater than 15% cost improvement. 

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