Healthcare spending in the US has reached a tipping point. We are currently spending more than we ever have on our nation’s healthcare and that cost is only increasing per individual. On average, other developed countries spend roughly half as much per person on healthcare than the U.S. spends. In fact, our spending beats our closest competitor, Switzerland, by 31 percent. But despite our spending, the U.S. consistently reports lower life expectancies and overall poorer health outcomes than other developed nations. With our spending showing no sign of tapering off, something must change.

Enter value-based care. This new payment model replaces fee-for-service care, which reimburses healthcare practitioners for services regardless of outcomes, with a value-based payment model designed in which only positive outcomes are reimbursed. I don’t know about you, but this seems like a change that’s much needed and long overdue. Many groups already participating in these alternative payment models are reporting significantly improved outcomes and lower costs of care. Getting value-based reimbursement up and running will be the key to reducing the fast-growing pace of healthcare spending – as well as improving the quality of life for our population.

As we make the switch to value-based care, it’s important to understand why we are making the switch, how we got to this point and where we are going next. Take a look below for 10 can’t miss stats that demonstrate the transition to value-based payments.

Healthcare Spending Growth

  1. National healthcare expenditures will increase to $5.7 trillion by 2026, growing at a rate of 5.5 percent each year. At that time, healthcare spending will represent 19.7 percent of our nation’s economy. – CMS Office of the Actuary
  2. Private insurance spending is expected to decelerate to 4.7 percent each year, from 2021 to 2026, as more baby boomers age into Medicare. – Health Payer Intelligence
  3. 72 percent of millennials reported health insurance costs as a cause of stress. Similarly, sixty-one percent of baby boomers and 51 percent of older adults reported stress due to their health insurance costs. – American Psychological Association (APA)
  4. Hospitals that keep operating business as usual will have a -15.8 percent margin by 2021. – Health Catalyst

Private Payers

  1. The Healthcare Transformation Task Force’s payer & provider members have made a commitment to have 75 percent of their respective businesses in value-based payment arrangements by 2020. – Healthcare Transformation Task Force
  2. The adoption of value-based care is expected to account for 59 percent of healthcare payments by 2020. – Aetna, 2018 Healthcare Trends
  3. Aetna has targeted 75 to 80 percent of its spend to be in a value-based contract by 2020. Currently 45 percent of its medical spend is tied to value. – Healthcare Finance News
  4. United Healthcare estimated that at the end of 2018, over $65 billion will be tied to value-based contracts. – United Healthcare Value-based Care Report
  5. Blue Shield of California and its accountable care organization gained $325 million in cost savings from 2010 to 2015. – Health IT Outcomes

What about Medicare?

  1. An estimated 57 percent of hospitals will receive Medicare bonuses under value-based programs in 2018, up from 55 percent in 2017. – Modern Healthcare

The Role of Technology

  1. Payers and providers are looking for technologies to assist in identifying the origin of healthcare costs. The need for clinical analytics for payers, providers, and other healthcare stakeholders is growing by a compound annual growth rate of 12.5 percent per year. – Market Research Future

The Transition for Outpatient Rehab

  1. According to a Clinicient survey in April 2017, only 38% of therapists have started preparing for value-based payment models and 65% of therapists feel like they don’t have a good understanding of value-based care. – Clinicient 2017 Value-based Care Survey
  2. Nearly half of the U.S. population experiences MSK pain annually. This represents a huge opportunity for physical therapists as they are primed to meet the needs of these individuals. – Journal of Orthopaedic & Sports Physical Therapy


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