Health execs, providers anticipate profit slide from value-based contracts, KPMG study says

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The ranks of healthcare execs and providers who see value-based payment contracts as detrimental to profits are swelling, a recent study from KPMG showed.

The audit, tax and advisory firm surveyed 292 executives, healthcare providers, payers and life sciences professionals during a webcast in early May and asked about the move from volume to value. Forty-five percent said they anticipate a drop in profits compared to a only a third who voiced that concern in 2014, KPMG said.

A subset of that group, comprised of healthcare providers, showed even more trepidation, with 52 percent saying they expected profits to drop thanks to value-based contracts. A quarters of providers said they expect a neutral impact, and 23 percent actually expected a boost in profits, results showed.

[Also: Value-based care good for population health management]

When they were asked the question two years prior, only 49 percent were pessimistic about the impact of value-based contracts on profitability.

"Healthcare companies need to prepare for a dramatic shift in how they get paid," said Dion Sheidy, KPMG's Advisory Healthcare Leader. "They need to arm themselves with analytics to make the case that value and quality are being delivered in patient care and to compete more effectively in their respective markets."

[Also: Hospitals moving slowly toward value-based pay, Health Catalyst survey says]

Current respondents predicted the biggest changes that will come from the implementation of value-based contracts included increased use of telemedicine and growing connections with retail, clinics, same day surgery and "lower acuity healthcare facilities".

At the same time, they predicted decreased focus on disease management, and less use of professionals like physicians assistants and nurse practitioners in lieu of doctors.

Twitter: @BethJSanborn