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Alternative payment models strain physician practices — 6 study findings

Physician practices are having trouble keeping up with increasingly complex and rapidly changing payment models, a joint study by RAND Corp. and the American Medical Association found.

Between January and June 2018, RAND researchers interviewed 84 people from 31 physician practices in six markets, as well as leaders of eight health plans, 10 hospitals or hospital systems, 10 medical societies and four Medical Group Management Association chapters.The study was a follow-up to a similar 2014 study.

Here are six takeaways:

1. Practices have expended substantial resources and administrative effort to keep up with changing policies and rules.

2. Many physician practices reported lacking the data management and data analysis capabilities needed to succeed with alternative payment methods. This was particularly true for small and independent practices.

3. Medical practices are increasingly trying to avoid the financial risks of alternative payment methods, including penalties for exceeding cost of care. Some practices renegotiated contracts with payers to reduce or transfer risk.

4. Practices, payers and other stakeholders might benefit from a slower, more consistent pace of change to payment models.

5. Alternative payment methods that enable practices to noticeably improve patient care receive widespread support. Methods that created reporting and documentation burdens or no perceptible improvements in care were met with skepticism.

6. Physicians and practice leaders could help design alternative payment methods to improve physician engagement and produce care improvements.

Access the full study here.

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