August 2, 2022

Study Finds Person-Centered Care Improves with Level of Provider Financial Risk

Medicare Advantage providers, particularly larger organizations, that are paid using full-risk capitation models outperform their lower risk counterparts when it comes to delivering person-centered care, a new study shows.

As the health care industry strives to increase equity and decrease disparities, person-centered care should be a focal point. Person-centered care is a holistic clinical approach that focuses on patient goals and preferences and is considered as a key catalyst for healthcare transformation. When evidence-based care incorporates a patient’s goals, preferences and values and is pursued through shared decision-making and patient engagement, clinician satisfaction rises, and patient outcomes improve.

Assessing Care by Reimbursement Type

The recent study, conducted by the Integrated Healthcare Association (IHA) and Purchaser Business Group on Health (PBGH) through a grant provided by The SCAN Foundation, evaluated provider performance by financial risk model against an array of person-centered measures. The goal was to determinate if any correlation existed between a provider organization’s mode of reimbursement and their success in delivering person-centered care.

Person-centered care measures were selected with guidance from subject matter experts from IHA and PBGH’s measurement committees, and included:

  • Five Patient Experience Measures
  • Seven Clinical Quality Measures
  • Total Cost of Care

For more information about the measures used, read the full report.

Levels of Financial Risk and Organization Size Matter

Member data from 151 California provider organizations engaged in providing care through 406 Medicare Advantage managed care contracts for 2020 was reviewed. The financial risk categories reflected in the provider contracts included:

  • No risk: All services paid through fee-for-service
  • Facility risk only: Capitation paid for facility services, but fee-for-service paid for professional services
  • Professional risk only: Capitation paid for professional service, but fee-for-service paid for facility services
  • Full risk: Capitation paid for both professional and facility services

The study found that full-risk provider organizations slightly outperformed professional risk provider organizations on most measures. Differences were statistically significant for three clinical quality and two patient experience measures. However, full-risk provider organizations performed slightly worse than those with professional risk on measures related to access to care and total cost of care.

Because only 1% of Medicare Advantage provider organization contracts were categorized as no risk or facility risk, the data was insufficient to compare performance of provider organizations with no financial risk as a part of this study. Previous research by IHA has shown that populations cared for by providers with any level of financial risk received better quality care at a lower total cost than populations cared for by providers with no financial risk.

When looking at organization size, large provider organizations outperformed small-to-medium ones — sometimes by a wide margin — across all measures except access to care and total cost of care. For all seven clinical quality measures and four of the five patient experience measures, the differences were significant.

Click here to view the full report. 

Going Forward

The new research indicated a positive relationship exists between delivering person-centered care and being paid under more flexible, population-based payment models that incorporate greater financial risk. As the health care industry strives to increase equity and decrease disparities, person-centered care should be a focal point. The use of provider financial risk arrangements through population-based payments is a key consideration in advancing person-centered care.

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