The Executive Suite: Value-based revenue makes up 6.74% of primary care income

Sunday, August 21, 2022

Value-based revenue makes up 6.74% of primary care income

The Medical Group Management Association released a report looking at the proliferation of value-based contracts and how quality metrics tie-in to revenue.

The report, 2022 MGMA DataDive Practice Operations, shows that revenue from value-based contracts accounted for varying amounts of total medical revenue in 2021 among reporting practices:

• 6.74% in primary care specialties

• 5.54% in surgical specialties

• 14.74% in nonsurgical specialties.

Across all practices, the median revenue amount from value-based contracts was $30,922 per FTE provider, according to MGMA.

Quality reporting measures make up a big part of value-based contracts. MGMA polling earlier in 2022 found that the adoption of quality performance metrics in value-based contracts also is being reflected in updated physician compensation plans, as 42% of medical groups tie some element of quality performance metrics to physician compensation plans.

The following measures were reported by respondents for their value-based contracts:3% hospital admission rate

11% hospital 30-day readmission rate
27% emergency department utilization rate
1% 30-day post operative infection rate.

Prior to the COVID-19 pandemic, MGMA noted there was a very slow growth in the inclusion of quality metrics in compensation plans. About one in four (26%) medical groups tied quality performance to physician compensation in 2016, but by July 2018, the share of groups with quality tied to compensation rose to 36%. A March 2019 poll found that nearly 4 in 10 (38%) of groups had tied quality performance to physician compensation.

These numbers have increased since the pandemic. According to the MGMA, 35% report they have increased the share of compensation tied to quality in the past two years, 62% of medical groups have the same share of compensation tied to quality versus 2019 levels, while only 2% of respondents said they decreased the percentage of compensation tied to quality.

Medical groups use in-house analysts, vendors/software, or both to handle their analytics. The majority (45%) reported they use both in-house analysts and software, while 40% only use in-house analysts, with 15% using only vendors or third-party software.