Abstract
Objectives: Little is known about the scope of alternative payment models outside of Medicare. This study measures the full complement of public and private payment arrangements in large, multi-specialty group practices as a barometer of payment reform among advanced organizations.
Study Design and Methods: We collected information from 33 large, multi-specialty group practices about the proportion of their total revenue in 7 payment models, physician compensation strategies, and the implementation of selected performance management initiatives. We grouped respondents into 3 categories based on the proportion of their revenue in risk arrangements: risk-based (45%-100%), mixed (10%-35%), and fee-for-service (FFS) (0%-10%). We analyzed changes in contracting and operating characteristics between 2011 and 2013.
Results: In 2013, 68% of groups' total patient revenue was from FFS payments and 32% was from risk arrangements (unweighted average). Risk-based groups had 26% FFS revenue, whereas mixed-payment and FFS groups had 75% and 98%, respectively. Between 2011 and 2013, 9 groups increased risk contract revenue by about 15 percentage points and 22 reported few changes. Risk-based groups reported more advanced implementation of performance management strategies and were more likely to have physician financial incentives for quality and patient experience.
Conclusions: The groups in this study are well positioned to manage risk-based contracts successfully, but less than one-third receive a majority of their revenue from risk arrangements. The experience of these relatively advanced groups suggests that expanding risk-based arrangements across the US health system will likely be slower and more challenging than many people assume.