• Resources
  • Blog
  • Journalists
  • Log In
  • Sign Up
  • Data Privacy
  • Send a Release
Cision PR Newswire: news distribution, targeting and monitoring home
  • News
  • Products
    • Overview
    • Distribution by PR Newswire
    • Cision Communications Cloud®
    • Cision IR
    • Sponsored Placement
    • All Products
  • Contact
    • General Inquiries
    • Request a Demo
    • Editorial Bureaus
    • Partnerships
    • Media Inquiries
    • Worldwide Offices

 

When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases

      • All News Releases
      • All Public Company
      • English-only
      • News Releases Overview

      • Multimedia Gallery

      • All Multimedia
      • All Photos
      • All Videos
      • Multimedia Gallery Overview

      • Trending Topics

      • All Trending Topics
  • Business & Money
      • Auto & Transportation

      • All Automotive & Transportation
      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • Auto & Transportation Overview

      • View All Auto & Transportation

      • Business Technology

      • All Business Technology
      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • Business Technology Overview

      • View All Business Technology

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Financial Services & Investing

      • All Financial Services & Investing
      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • Financial Services & Investing Overview

      • View All Financial Services & Investing

      • General Business

      • All General Business
      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • General Business Overview

      • View All General Business

  • Science & Tech
      • Consumer Technology

      • All Consumer Technology
      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • Consumer Technology Overview

      • View All Consumer Technology

      • Energy & Natural Resources

      • All Energy
      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • Energy & Natural Resources Overview

      • View All Energy & Natural Resources

      • Environ­ment

      • All Environ­ment
      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • Environ­ment Overview

      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • All Heavy Industry & Manufacturing
      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • Heavy Industry & Manufacturing Overview

      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • All Telecomm­unications
      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • Telecomm­unications Overview

      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • All Consumer Products & Retail
      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • Consumer Products & Retail Overview

      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Health

      • All Health
      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • Health Overview

      • View All Health

      • Sports

      • All Sports
      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • Sports Overview

      • View All Sports

      • Travel

      • All Travel
      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • Travel Overview

      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • All Policy & Public Interest
      • Advocacy Group Opinion
      • Animal Welfare
      • Congressional & Presidential Campaigns
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • U.S. State Policy
      • Policy & Public Interest Overview

      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • All People & Culture
      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • People & Culture Overview

      • View All People & Culture

      • In-Language News

      • español
      • português
      • Česko
      • Danmark
      • Deutschland
      • España
      • France
      • Italia
      • Nederland
      • Norge
      • Polska
      • Portugal
      • Россия
      • Slovensko
      • Suomi
      • Sverige
  • Overview
  • Distribution by PR Newswire
  • Cision Communications Cloud®
  • Cision IR
  • Sponsored Placement
  • All Products
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • PR Newswire: news distribution, targeting and monitoring
  • Send a Release
    • ALL CONTACT INFO
    • Contact Us

      888-776-0942
      from 8 AM - 10 PM ET

  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • News in Focus
    • Browse All News
    • Multimedia Gallery
    • Trending Topics
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • Overview
  • Distribution by PR Newswire
  • Cision Communications Cloud®
  • Cision IR
  • All Products
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR

KPMG Survey Reveals Major Disconnect Among Healthcare System, Health Plan And Pharma Execs On New Payment Systems

Execs Seem Uncertain About Sustainable Business Models and the Pace of Change


News provided by

KPMG LLP

Aug 28, 2012, 08:00 ET

Share this article

Share this article


NEW YORK, Aug. 28, 2012 /PRNewswire/ -- Given increasing clarity that the U.S. healthcare economy is unsustainable in its current form, healthcare and pharmaceutical executives are clearly uncertain whether or not existing business models are sustainable over the next five years, even though they do anticipate major change in the short-term, according to the findings from a recent survey by KPMG LLP, the U.S. audit, tax and advisory firm.

In surveying over 200 senior executives at leading U.S. healthcare systems, health plans and pharmaceutical organizations, KPMG found that the largest percentage of respondents – 40 percent, 53 percent, and 43 percent of systems, plans and pharmaceuticals, respectively – said that their current business model was somewhat sustainable over the next five years, while 20 to 27 percent of respondents in each group said current business models were either not very or not at all sustainable over the next five years.

"The findings really underscore the key question of whether or not any organization can be both committed to non-volume-based care economics while at the same time working to sustain a volume-driven reimbursement status quo," said Ed Giniat, National Sector Leader, KPMG Healthcare & Pharmaceuticals. "The institutional schizophrenia that emerges will be challenging to manage at best. Going forward, the winners—whether health plans, healthcare systems, life science companies, or other organizations—will be defined by their leadership in recognizing the necessity of change and then planning and executing effective strategies based on this recognition."

In fact, despite their majority opinions that current business models are at least somewhat sustainable, many provider (65 percent) and health plan (41 percent) executives do expect major business model changes in the next five years, while a majority of pharmaceutical executives (63 percent) expect only moderate changes. Nearly half of providers and health plans, and a third of pharmaceutical executives would like to see a more rapid progression to some type of value-based payment, but most anticipate that transition will in fact be accomplished more gradually than not, with less than a quarter of all provider reimbursement fashioned as some type of value-based payment, according to the findings. 

"Organizations are clearly considering the effectiveness of their fee-for-service business models but migration to more value-based models will take some time, and will include a mix of old and new delivery and payment systems," said KPMG's Giniat. "The only way for more rapid integration to occur is for these stakeholders to lead the change and make it happen, but many of these organizations are using techniques more aligned with sustaining existing models."

Healthcare Systems: maintain or increase commercial reimbursement rates
For example, when asked how important it is to at least maintain and potentially increase commercial insurance reimbursement rates versus Medicare and Medicaid, 50 percent of providers said it was extremely important. Further, 80 percent of these leading healthcare systems said they have the market position to do just that. Nevertheless, in a contradictory finding, they also cited raising prices on commercial payers as not a very important factor in developing a sustainable long-run business model. Other lower priority factors cited included owning health plans and consideration of non-acute-care components.

"The responses by healthcare systems reflect the conflicts in business planning that arise from being paid for volume currently while contemplating a different payment future," said Brad Benton, National Account and Advisory Leader for KPMG Healthcare.  "However, the evidence is compelling that the traditional reimbursement environment is not sustainable and providers should be focusing on the hard work of business model redesign and real clinical integration to be successful under a value-based payment model."

Health plans see pay for performance incentives curbing costs
Payers were more optimistic about the possibility of partnerships involving providers and suppliers, with 55 percent of respondents saying it was possible. Additionally, they said they expect that healthcare information technology, evidence-based medicine, disease management, and pay for performance incentives will be the most effective approaches to curbing costs.

Additionally, in response to cost shifting, health plans expect employers will demand lower cost offerings and increased use of wellness and health management initiatives. Health plans also see their biggest growth coming from consumer-directed or high deductible plans, while they expect declines in small group employers and large, fully insured groups. In fact, more than half of the plans surveyed said they are concerned about an exit by large employers.

"Small group employers will likely migrate to exchanges with individuals," said Cynthia Ambres, a principal, physician and U.S. member of the KPMG Global Healthcare Center of Excellence. "But health plans are also concerned about large employers exiting, as some are already assuming risk and using healthcare plans for administrative services only. Health plans must focus on differentiating themselves to attract the individual market."

Pharmaceuticals strategies
Pharmaceutical executives are also struggling with change strategies. On one hand, 47 percent said a shift toward health system accountability would have a positive impact on their industry, and more than half said they are currently or will be using risk and outcome-based contracting in the future. Additionally, more than 70 percent of the executives said that comparative effectiveness research (CER) data would help show the value of their products.

On the other hand, 54 percent of executives said reimbursement reform would have a negative impact, and more than half said CER would be used as a tool to cut prices. Additionally, 40 percent cited changes in reimbursement as a key reason for the industry's pipeline drought. Fifty-six percent see the current premium pricing strategy for specialty pharmaceuticals as viable in the next one to two years, and another 39 percent said it would be viable in the next five years.

"You get the sense that the change in reimbursement policy has disrupted the traditional way of moving products into the marketplace, and that even five years out, there is a lot of effort being made to sustain the current pricing models for specialty pharmaceuticals," said David Blumberg, KPMG National Pharmaceutical Advisory Leader.

The KPMG survey was conducted between January-June 2012 and reflects responses from 104 healthcare system executives, 51 health plans executives and 54 pharmaceutical executives at leading organizations in the U.S. A webcast on the findings from the survey is available via the KPMG Healthcare & Pharmaceutical Institute (HPI). The KPMG Healthcare and Pharmaceutical Institute is a forum for healthcare business leaders to gain insight into emerging issues, consider approaches to help balance risk and controls and improve performance, and further explore the accelerating transformation within the healthcare industry, both domestically and globally.

About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 145,000 people, including more than 8,000 partners, in 152 countries.

Contact:

Laura Sheridan Powers


KPMG LLP


212 872 7665


[email protected]

SOURCE KPMG LLP

Modal title

Contact Cision

  • Cision Distribution 888-776-0942
    from 8 AM - 9 PM ET

  • Chat with an Expert
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices

Products

  • Cision Communication Cloud®
  • For Marketers
  • For Public Relations
  • For IR & Compliance
  • For Agency
  • For Small Business
  • All Products

About

  • About PR Newswire
  • About Cision
  • Become a Publishing Partner
  • Become a Channel Partner
  • Careers
  • COVID-19 Resources
  • Accessibility Statement
  • Asia
  • Brazil
  • Canada
  • Czech
  • Denmark
  • Finland
  • France
  • Germany
  • India
  • Israel
  • Italy
  • Mexico
  • Middle East
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • United Kingdom

My Services

  • All New Releases
  • Online Member Center
  • ProfNet

Contact Cision

Products

About

My Services
  • All News Releases
  • Online Member Center
  • ProfNet
Cision Distribution Helpline
888-776-0942
  • Terms of Use
  • Privacy Policy
  • Information Security Policy
  • Site Map
  • RSS
  • Cookie Settings
Copyright © 2022 Cision US Inc.