Health Outcomes: Facts & Figures

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Nearly 3 in 10 – 29 percent – of total U.S. health care payments were tied to alternative payment models in 2016, compared to 23 percent in 2015, according to a report by the Health Care Payment Learning & Action Network, a public-private partnership launched in March 2015 to drive adoption and alignment of APMs. Results were in line with the goals of the LAN to tie 30 percent of total U.S. health care payments to APMs by 2016 and 50 percent by 2018.

The report marks the second year of the LAN APM Measurement Effort, the largest and most comprehensive of its kind at the national level. The findings capture actual 2016 health care spending from four data sources: the LAN, America’s Health Insurance Plans, the Blue Cross Blue Shield Association, and the Centers for Medicare and Medicaid Services across commercial, Medicaid, Medicare Advantage, and fee-for-service Medicare market segments, and categorizes them according to the four categories of the original LAN APM Framework. The survey collected data from more than 80 participants, accounting for nearly 245.4 million people, or 84 percent of the covered U.S. population.

According to the LAN APM Measurement Effort’s latest results, 43 percent of health care dollars are spent in Category 1 (e.g., traditional FFS or other legacy payments not linked to quality), down from 62 percent in 2015, while 28 percent of health care dollars are spent in Category 2 (e.g., pay-for-performance or care coordination fees), up from 15 percent the previous year, and 29 percent of health care dollars go to a composite of Categories 3 and 4 (e.g., shared savings, shared risk, bundled payments, or population-based payments). Total spending in Categories 3 and 4 amounted to $354.5 billion in 2016.

“We are encouraged by these results and the great progress being made towards APM adoption,” says Trent Haywood, chief medical officer at the Blue Cross and Blue Shield Association. “These findings underscore the importance of the public and private sectors working in concert supporting providers towards APM adoption. We know that providers need information and support from health plans to take on risk. This Measurement Effort helps develop the rationale for continued payment reform, and we as health plans must continue to share information, clinical support and data on spending and quality to determine to encourage further progress.”