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New Brandeis Study: Medical Groups That Take On Risk Show Success in Quality, Care Management

The American Journal of Managed Care recently published a second round of research sponsored by the Council of Accountable Physician Practices (CAPP) on the prevalence and magnitude of capitation and other alternative payment contracts among CAPP’s organized physician groups.

“Risk Contracting and Operational Capabilities in Large Medical Groups During National Healthcare Reform” represents CAPP’s ongoing commitment to promoting the benefits of outcomes-based payments, one of our five pillars.

CAPP partnered with Brandeis researchers Robert Mechanic and Darren Zinner in 2011 to launch a longitudinal study. The focus of the research is to gauge the incidence of alternative payment contracts among CAPP groups, understand these groups’ previous experience with managing risk, and to define the approaches to physician compensation utilized by these groups. This published report is the second round of research conducted.

“This is one of the only published analyses examining payment and contracting practices for a variety of organizations across the full range of their payers. This allows us to better assess the relationship between contracting structures and organizational practices likely to positively impact performance” said Mechanic.

Twenty-two CAPP groups have participated in the survey’s second round, as well as 11 member groups of the Group Practice Improvement Network. The survey asked for information about quality and cost management programs, risk contracting, physician compensation changes and other factors to evaluate risk-based payment models.

According to survey findings, medical groups that received a high portion of revenue from risk contracts were able to more successfully implement advanced programs to avoid hospitalizations and provide care management. It also found that these groups placed greater emphasis on quality and patient experience in their physician compensation models and relatively less on the amount of care provided.

“Groups that had a higher proportion of risk contracts generally had physician compensation models with more emphasis on quality, patient experience and performance, compared to groups in fee-for-service models,” said Mechanic.

He predicted that future rounds of this survey would show a slow and steady movement toward alternative payment models. “Taking on risk is not easy or straightforward, so you really have to have an organization that believes in managing care and physicians that buy into the culture,” he said.

“The Brandeis findings are clear evidence that risk-based payment models allow physicians and medical groups to focus on the patient and their needs, not just on a bottom line,” said Laura Fegraus, Executive Director of CAPP. “CAPP is excited to be a part of this ongoing project to track payment reform progress and provide both current analysis and consistent historical accounting of the “pay-for-value movement.”

A third round of this survey is currently in the field. Results are expected in early 2017.

Read the entire journal article here.