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Pandemic Sparks Payment Model Reform

Transitioning fee-for-service healthcare to value-based care models has not been easy. According to the most recent Alternative Payment Model (APM) Measurement Report, fee-for-service still accounts for 39% of healthcare payments. Hospitals and doctors have been reluctant to embrace change, particularly arrangements in which they assume downside financial risk.

The fee-for-service model has been hit hard by the COVID-19 crisis as elective procedures have been postponed (some indefinitely) during the pandemic. In addition, many practices have considered closing the doors because the financial hit has been too hard to sustain. This phenomenon has highlighted the weakness in a transaction-based system dependent on volume. Likewise, it has accelerated both the interest and transition to value-based care models that are not dependent on volume.

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