How bundled payments affect healthcare use, quality

Certain bundled payment models can lower costs and maintain or improve quality, but results on healthcare spending and use vary, especially by clinical episode type, according to a study published in Health Affairs.

For the study, researchers reviewed three CMS bundled payment programs: the Acute Care Episode Demonstration, the voluntary Bundled Payments for Care Improvement initiative, and the mandatory Comprehensive Care for Joint Replacement model. Study authors reviewed the programs on spending, utilization and quality outcomes. All the studies were published from 2016-19.

Twenty studies reviewed show that the bundled payment models maintained or improved quality while lowering costs for lower extremity joint replacement. This didn't hold true for other procedures and conditions. Study others added that a significant number of studies didn't find any effect on healthcare spending, although this varied by clinical episode. 

"Our review also suggests that policymakers should account for patient-level heterogeneity and include risk stratification for specific conditions in emerging bundled payment programs," the authors said.

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The opiod crisis is making insurers take alternative medicine seriously

Now they’re looking for other ways to help patients manage chronic pain—such as acupuncture and chiropractic care.

In the past decade, some in the medical community have come to endorse alternative forms of medical practice such as reiki, acupuncture, and even scientifically dubious practices like energy healing. For hospitals, alternative medicine has become a distinguishing and sellable feature set that is helping to prop up their revenue. However, insurance has been slow to cover these services, some of which don’t have any scientific backing.

ut insurers are slowly becoming more willing to pay for some of the longer-established alternative medicines such as meditation, chiropractic care, and acupuncture, which recent studies show can help with chronic pain management. As regulators and health systems move to reduce opioid prescriptions, health insurers are giving these treatments a second look.

The latest support for alternative medicine comes from the Center for Medicare and Medicaid Services (CMS). Last month, the nation’s largest healthcare payer expanded its coverage to include acupuncture for lower back pain. CMS will cover up to 12 sessions taken over the course of 90 days with the potential for eight additional sessions if the patient shows improvement. However, since acupuncturists are not recognized by CMS and cannot bill for services, acupuncture work must be done by a trained nurse practitioner, physician, or physicians assistant within a traditional doctors’ office. Still, the move illustrates a willingness by one of the most scrutinous payers in the country to find value in methods that it previously treated skeptically.

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New goals set for value-based payments

The Health Care Payment Learning and Action Network, a public-private partnership launched by HHS in 2015, has set new goals for linking healthcare payments to the value of care provided rather than the amount of care provided. 

The network announced the new goals Oct. 24. They are based on shared accountability alternative payment models in the LAN Alternative Payment Model Framework, which represents payments from government and private insurers to healthcare providers.  

The new goals for adoption of shared accountability alternative payment models are:

• Medicare Advantage and traditional Medicare (30 percent adoption by 2020, 50 percent by 2022 and 100 percent by 2025)

• Medicaid (15 percent adoption by 2020, 25 percent by 2022 and 50 percent by 2025)

• Commercial health plans (15 percent adoption by 2020, 25 percent by 2022 and 50 percent by 2025)

The new goals come as the network sees progress in shifting to value-based healthcare payments.   

The LAN examined data from 62 health plans and seven states representing about 227 million Americans and 77 percent of people covered through commercial health plans, Medicare Advantage, traditional Medicare or Medicaid.

Network representatives found that 35.8 percent of U.S. healthcare payments in 2018 were made through shared accountability alternative payment models. 

In 2017, 34 percent of U.S. healthcare payments were tied to shared accountability alternative payment models, according to network representatives. 

More information is available here.

Waste accounts for one-quarter of healthcare spending

A new study found waste accounts for roughly one-quarter of all U.S. healthcare spending, an estimate that's in the same ballpark as its predecessors.

The cost of waste in the U.S. healthcare system ranges from $760 billion to $935 billion annually, according to a JAMA review of 54 peer-reviewed studies, government reports and other information, released Monday. The study found one-quarter of that could be cut using interventions found to reduce waste.

Two previous studies on the subject from 2012 estimated waste at roughly 30% and 34% of total healthcare spending.

"There have been a lot of changes in the healthcare system in the last seven years," said Dr. William Shrank, an author of the study and chief medical and corporate affairs officer for health insurer Humana. "We thought it was an appropriate time to update that study."

Shrank undertook the research with a Humana colleague and a third researcher from the University of Pittsburgh School of Medicine.

One reason the new study's estimate is lower than previous ones is because it took the conservative approach of not extrapolating Medicare-only data to the broader population, whereas previous studies did. Shrank said Medicare-only research represented the minority of contributing studies.

The current study divided waste into six previously identified categories. Administrative complexity accounted for the most waste, at $265.6 billion annually. Below that was waste due to pricing failure, which costs $230.7 billion to $240.5 billion annually. Failure of care delivery accounts for $102.4 billion to $165.7 billion annually. Overtreatment or low-value care results in $75.7 billion to $101.2 billion in waste annually. Waste related to fraud and abuse costs between $58.5 billion and $83.9 billion annually. Finally, failure of care coordination generates $27.2 billion to $78.2 billion in waste annually.

The study also estimated potential annual savings from measures shown to cut waste. In aggregate, those interventions could save $191 billion to $282 billion annually, or about 25% of the total cost of waste.

"There's always going to be some waste," Shrank said. "I don't think we'd ever expect to see zero waste."

But there were no interventions in the scientific literature to chip away at the biggest culprit: administrative waste. Shrank said that's because those efforts tend to happen within businesses and aren't widely disseminated. He hopes this study encourages more shared learning across the healthcare industry.

The key takeaway theme of the study, in Shrank's mind, is that aligning payers and providers through value-based care initiatives can go a long way toward cutting waste. He said sources of administrative complexity like prior authorization, utilization management or other billing issues are simply methods payers use to reduce waste.

"In an environment where payers are pre-paying physicians or sharing risk with physicians for the management of populations, much of these sources of administrative complexity can be reduced or eliminated or streamlined," he said.

Other experts drew far different conclusions.

Former CMS Administrator Dr. Don Berwick, the Institute for Healthcare Improvement senior fellow who wrote a 2012 JAMA study on healthcare waste, said value-based payment arrangements like bundled payments and accountable care organizations have been shown to generate 1% to 3% in cost savings—a "big gap" from the waste estimates researchers have published.

"I tend to be an optimist and I'm grateful for the progress, but I suspect we're going to need bolder approaches to changing the financing of healthcare than we have accepted so far," he said.

Similarly, Dr. Ashish Jha, professor of health policy in the Harvard T.H. Chan School of Public Health, said research has shown almost no value-based care programs have yielded improvement. Even the most effective form of value-based care, physician-led ACOs, have produced savings up to roughly 3%.

"I've got literally dozens of studies I can point to that show it's having little to no impact," he said. "This is not one where people just get to have differing opinions. You've got to bring some evidence to bear for why it's going to be useful, because all the data so far show things heading in one direction."

Berwick said he thinks the solution to healthcare waste will need to be a political one. People must mobilize to say, " 'It's enough. We're not going to put up with this kind of administrative waste,' " he said. " 'We're not going to put up with this obscene pricing. It's time to stop.' I don't know without that kind of political force, how these circumstances can be changed."

Jha thinks part of the solution will be to address healthcare's irrational pricing. One potential tool is price transparency improvement that will help people shop around for the lowest-cost care, although there's not much evidence that such efforts are helpful in lowering prices.

Enhanced regulation of healthcare monopolies could also help, Jha said. In recent years, he said federal agencies haven't adequately pushed back against mergers and acquisitions, but that's partly because they're underfunded. Another difficult but potentially helpful task would be to either break up large health systems or enable new providers to enter markets, he said. Jha said the federal government could lower drug prices by importing generic drugs from other countries and potentially negotiating drug prices directly.

Shrank believes stronger payer and provider relationships will help chip away at waste by allowing for more value-based partnerships. Those bonds must be built on trust and transparency, he said.

"In the absence of trust, that relationship is much more limited and our ability to take better care of people and reduce waste similarly will be far more limited," Shrank said.

FROM

https://www.modernhealthcare.com/healthcare-economics/waste-accounts-one-quarter-healthcare-spending

How Employers Are Fixing Health Care

A 56-year-old man who works at Walmart — we’ll call him Bill — had been suffering from mild neck pain for years. Recently the pain had worsened, and his wife noticed a subtle tremor in his hands. An MRI showed some narrowing of the spinal column along with disc degeneration. A local surgeon explained that Bill’s best option was spine surgery.

Bill had two choices. He could have the surgery at his community hospital and absorb deductibles and co-pays. Or he could enter Walmart’s travel surgery program and fly with his wife to a top spine center in another state, all costs covered. Bill opted for the travel plan.

Two weeks later the couple headed to Danville, Pennsylvania, for an evaluation at Geisinger Medical Center. The team there immediately noticed Bill’s tremor and some shuffling as he walked. They suspected the problem wasn’t his neck. A neurologist saw him that day and confirmed the team’s suspicions: Bill had Parkinson’s disease.

The team conferred with Bill’s local doctors to map out a plan of care. The next morning Bill and his wife flew home, and he began treatment, which was covered under Walmart’s standard plan. He paid exactly zero for a correct diagnosis and avoided potentially dangerous surgery that wouldn’t have helped — and Walmart saved about $30,000 by averting the unnecessary procedure. Bill’s symptoms have dramatically improved, and he’s returned with new energy to his hobbies and work.

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Telehealth, prescription drugs on some Amazon shoppers' wish lists, survey says

Consumers want Amazon to offer more healthcare-related services and products, including telehealth and prescription drugs, a new survey from Investing.com suggests.

For its survey, the financial portal polled 1,013 Amazon shoppers, both Prime members and non-Prime members. The survey asked respondents which products and services they would purchase under the Amazon brand.

About 37 percent of respondents said they were interested in purchasing Amazon-branded prescription drugs. This compares to about 30 percent of respondents who were interested in medical marijuana and 16 percent who said virtual physician visits.

Amazon has already debuted several private-label brands. In August, it  quietly launched Basic Care, an exclusive line of 60 over-the-counter healthcare products, and in November reports surfaced that the e-commerce giant had four OTC brands

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https://www.marketwatch.com/story/shoppers-want-amazon-brand-prescription-drugs-medical-marijuana-and-cryptocurrency-2019-02-06

Azar says new mandatory oncology pay model is coming

By Virgil Dickson  | November 8, 2018

From Modern Healthcare

The CMS plans to unveil a mandatory Medicare payment model for cancer patients, and two new voluntary models for cardiac care in the coming weeks, said HHS Secretary Alex Azar. That means the Trump administration is reversing course from its prior stance that all payment models which put providers at risk of losing money if they don't lower costs of care should be voluntary.

"Real experimentation with episodic bundles requires a willingness to try mandatory models," Azar said at the Patient-Centered Primary Care Collaborative Conference on Thursday. "We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback."

The new mandatory model will focus on radiation oncology, Azar said, but offered no other details.

HHS first revealed the need for a radiation oncology model in a report to Congress last year. In that document it said that Medicare Part B payments for radiation treatment increased 216% between 2000 to 2010 due to the use of more expensive treatments and a rise in the number of cancer patients.

Demand for radiation therapy may increase 38% for seniors ages 65 and older from 282,000 in 2010 to 388,000 in 2020, according to the report. 

Azar's remarks follow the unveiling of the administration's first mandatory model last week. That arrangement seeks to lower spending on drugs administered in doctor offices and hospitals.

The two in the works cardiac models build upon ones canceled by the Trump administration last year.

The CMS previously has acknowledged that some hospitals wanted the models to continue on a voluntary basis, as they had already invested resources to launch them. On average, hospitals have five full-time employees, including clinical staff, tracking and reporting quality measures under value-based models, according to the AHA. They are also spending approximately $709,000 annually on the administrative aspects of quality reporting.

Earlier this year, the CMS reported that a mandatory payment model targeting joint replacement surgeries dropped spending on average by 3.9% or $1,127 compared with hospitals not participating in the model. At the same time, researchers observed no statistically significant changes in the quality of care as measured by readmission rates, emergency department visits, and deaths.

Medicare is driving ACO growth: 4 report findings

ACOs continued to grow in size and count in 2017 and early 2018, according to an analysis from Leavitt Partners and the Accountable Care Learning Collaborative. 

Here are four findings from their report, published in Health Affairs. 

1. There were 1,477 ACO contracts at the end of the first quarter of 2018, spread among 1,011 ACOs. Contract counts include both public and private payer partnerships, and an ACO may have contracts with multiple payers. A total of 232 new ACOs were created in 2017 and the first quarter of 2018. 

2. Forty-eight percent of ACO contracts are commercial, compared to 46 percent for Medicare. Medicaid accounts for just 5 percent of all contracts. However, Medicaid contracts tend to be much larger in terms of lives covered. The average Medicaid ACO covers 43,500 patients. Comparatively, the average commercial ACO covers 24,300 lives, and the average Medicare ACO covers 17,500. 

3. ACOs covered 32.7 million patients across the country — roughly 10 percent of the U.S. population. At the end of the first quarter of 2018, ACOs covered about 2 million more patients than the year prior, representing 6 percent growth. ACOs can be found nationwide — at least 2 percent of the population in every state is part of an ACO — but they are not evenly distributed between or within states. 

4. Medicare was the primary driver of ACO growth through the end of the first quarter of 2018. Commercial contracts saw little growth, and Medicaid contracts declined slightly. Medicare added 76 new two-sided risk contracts alone. These new contracts were in the Medicare Shared Savings Program Tracks 1+, 2 and 3, as well as the Next Generation program. Twenty-seven of these contracts involved groups that had never participated in an ACO program before. The authors said they believe the Quality Payment Program, which began in 2017, drove continued interest in Medicare ACOs, especially two-sided risk contracts, as they offered a viable way to enter the program's more lucrative track. 

Read the full report here.

4 new types of healthcare deals we're seeing

We saw this article written by Molly Gamble in Beckers Hospital Review Today and wanted to share it.

Healthcare dealmaking involves more players with different goals and new business models than ever. It is a disservice to refer to healthcare M&A with the same vocabulary as in decades past. Tried and true language still serves a purpose, but doesn't express the aims and diversity of mergers and acquisitions in healthcare today. 

Here are four archetypes of new healthcare deals, as outlined by PwC. The firm's full report, "The New Health Economy in the Age of Disruption," can be found here. 

1. Vertical integrators. This category represents deals such as CVS Health and Aetna, Optum and DaVita Medical Group, and Cigna and Express Scripts. These couples are trying to lower costs of the supply chain by owning more of it and extending those savings to consumers. The challenge? Only half of executives involved in M&A report financially successful integrations. That is a concerning statistic for healthcare executives "about to spend tens of billions to make acquisitions," according to the PwC team.

2. Employer activists. Here you have JPMorgan, Berkshire Hathaway and Amazon. Combinations such as this are setting out to limit the growth of their own healthcare costs. The challenge? Their negotiating power is relatively modest. Although JPMorgan, Berkshire and Amazon are inarguably well capitalized and substantial in size, their employees are spread throughout the U.S. and not highly concentrated in any one place. Even their headquarters are spread out, in New York, Omaha and Seattle, respectively. This dilution makes it tough for employer activists to hold much leverage in negotiations with local providers and payers.

3. Technology invaders. Google, Apple, Amazon, Lyft and Uber live in this class. The deals these companies strike are made to command more space in the healthcare industry, and they have an advantage in their understanding of modern consumer expectations and needs. The challenge? Technology invaders still need legacy or existing companies as partners for healthcare industry expertise. As one executive put it in the PwC report: "Any tech company can build a diabetes product. Few tech companies can build a diabetes product knowing the history of what's worked, what hasn't worked."

4. Health retailers. Retailers like Walmart, CVS Health, Amazon and Rite Aid want to gain market share by functioning as healthcare providers. These businesses have an advantage in that they understand patients first as customers and consumers, with insight into nonclinical needs that affect their health, such as access to food. The challenge here is online versus brick-and-mortar strategy. As virtual retailers meet key consumer needs without the overhead costs and restrictions of retail storefronts, businesses and deals in this category face strategic questions in a changing environment.

Hospitals pressured as insurers pursue more vertical integration

Hospitals that don't adapt could get squeezed out of the care continuum as insurers grow and direct more care to lower-cost settings, according to an analysis from Moody's Investors Service.

Both not-for-profit and for-profit hospitals are feeling the pressure of falling inpatient volumes and reimbursement levels from government payers along with rising drug costs and labor expenses, as well as regulatory changes to policies like the 340B drug discount program.

Those downward pressures on margins will continue if insurers' plans to vertically integrate with providers come to fruition, the ratings agency said. The Medicare Payment Advisory Commission estimated that hospital margins could sink to negative 10% in 2017, a drop from negative 7.1% in 2015.

Insurers have had to get creative since regulators blocked recent attempts to grow horizontally, including the thwarted mergers between Aetna and Humana, and Anthem and Cigna Corp. They now look to align with providers through proposed combinations between CVS Health and Aetna, UnitedHealth Group's Optum and DaVita Medical Group, and Humana and Kindred Healthcare—partnerships designed to prevent hospital visits through regular primary-care checkups and home healthcare. 

Since they don't have to carry the hefty overhead of full-service hospitals, insurers that combine with physician groups and non-acute-care service providers can offer similar preventive, outpatient and post-acute care to their members at lower costs. Scale will also give them an upper hand in rate negotiations, denting providers' bottom lines. 

The proposed deals could give insurers the power to direct care rather than doctors, said Juan Morado Jr., of counsel at law firm Benesch. But limiting patient choice is a risky proposition, he added.

As insurers grow their physician networks, they will be better able to carve out "high-cost" hospitals or certain services from contracts, which will mean lower volume and revenue for hospitals, Moody's said. Optum, which has been on a physician-acquisition binge, could funnel more care to cheaper, risk-bearing hospitals. Also, Anthem's policy to limit coverage of emergency visits in certain states will mean fewer patient visits, lower revenue and higher bad-debt rates for hospitals, the report said. 

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Consultants warn 'change or get out of the way' next year

By Alex Kacik  | December 12, 2017

Certain healthcare industry middlemen including pharmacy benefit managers, drug wholesalers and insurers will get squeezed out if they don't adapt and reaffirm their value, according to a new report from PricewaterhouseCoopers. 

Intermediaries like PBMs that work for payers to negotiate with pharmaceutical companies on the price of their products have been targeted for their role in huge price hikes that have plagued the industry. These middlemen should increase price transparency, deliver better pharmaceutical and clinical data to boost patient care, and diversify their business lines to secure their place in the industry, PwC's Health Research Institute said in its annual report issued Tuesday.

Providers must expand beyond their sector or get left behind. They will need to form cross-sector relationships to share data and deliver more integrated care models to survive, the report said.

Healthcare companies could get away with solely being a pharmacist, PBM or retail clinic, but now they must fulfill multiple roles in the industry, said Gurpreet Singh, a partner at PwC and its health services sector leader. 

"Most PBMs and distributors don't play a specific role in the healthcare ecosystem—some share infrastructure and have an interest in data they could use," he said. "Unless they use (their role) toward driving wellness through care delivery, finance care or provide new diagnostic tools, they will get squeezed out." 

Some PBMs have tried to flip the traditional model and diversify their businesses. Prime Therapeutics—a PBM owned by several Blue Cross and Blue Shield health plans—has created a combined specialty pharmacy and mail services company with Walgreens. EmpiRx Health has an evidence-based clinical care management program where pharmacists work with physicians to deliver the most appropriate treatments. Insurance giant Anthem partnered with CVS Health to form a PBM to better align patient care. Also, CVS is courting Aetna in a deal that could funnel more care through its retail clinics. 

Insurers should seek partnerships as more employers consider contracting directly with a provider or accountable care organization. Group purchasing organizations are less integral to cost-saving strategies as providers develop better aggregation and data technology through mergers and partnerships. 

Wholesalers will also need to adapt as their margins shrink due to generic-drug pricing deflation and manufacturers limit branded-drug price increases in response to heightened public scrutiny, the report said. 

"It's not that purchasers don't value their relationships with intermediaries," Mike Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, said in the report. "In general, where companies have stepped up and taken innovative approaches to move to value, purchasers have had their back."

In 2017, the healthcare industry faced unprecedented tumult—sweeping policy changes and natural and manmade disasters. Next year could be just a rocky. Therefore, healthcare organizations should seek out greater cross-sector collaboration, new strategic investments and creative efficiencies to build resilience, according to the report.

The CVS-Aetna deal was an example of a cross-sector collaboration that takes the form of vertical integration, a trend that will continue through next year, industry experts said. These types of deals will allow more ambitious risk-taking and cost synergies that should further insulate healthcare companies from looming changes and perhaps even help solve some of the industry's most pressing matters, Singh said. 

"CVS-Aetna is creating a type of vertical integration centered around the consumer," he said. "It's tough to solve the opioid crisis if you're one player in pharma—you need to be part of the community."

Aetna's enterprise-wide opioid task force aims to increase communication between prescribing physicians and patients at risk for opioid misuse while CVS is tracking social factors that may influence consumer and prescriber behavior. Data sharing and tracking of health disparities are weapons in the fight against opioid abuse, the report said. They could also help insurers and providers reduce costs and boost Medicaid and Medicare reimbursement by taking on more risk in value-based payment schemes. 

Relying on an extended care team that includes nutritionists, social workers and community health workers could save providers $1.2 million a year per 10,000 patients in a value-based payment environment, PwC found. 

That model, including screenings and interventions for food insecurity, helped Toledo, Ohio-based health system ProMedica drop emergency visits 3%, reduce hospital readmissions 53%, and increase primary care visits by 4%.

These strategies will help the industry prepare for additional price transparency pressures and looming policy overhauls, the report said. 

More statewide healthcare pricing bills are passing—much to the chagrin of drug companies—many of which mandate that manufacturers report a drug's cost and explain price changes, as in California. Other approaches include allowing Massachusetts' Medicaid program to refuse to pay for certain high-cost drugs and Maryland's law that directs the state to monitor price increases and sue manufacturers if there was an "unconscionable increase." Manufacturers have filed lawsuits against the California and Maryland laws. 

Providers should budget for increasing compliance and security costs related to new payment methods and more potentially vulnerable devices. They must also find ways to improve the patient experience. And they should brace for uncertainty that will continue to trouble the industry as policy changes loom, the report said. 

Health organizations, particularly those doing business in multiple states, should beef up compliance and local advocacy efforts as states take more control over healthcare policy. Slimming costs will also help mitigate policy changes, according to the report. 

"Creating incentives around reducing costs and improving quality are catalysts for change," Singh said.

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Healthcare execs expect value-based care to disrupt industry more than science in decade ahead

C-level executives and investors from across the healthcare industry rank pricing and reimbursement as the No. 1 strategic pressure facing the healthcare industry today, according to a survey from consulting firm Lazard.

Leaders said they expect value-based care and risk-sharing payment models to be the most transformative force in the healthcare industry over the next five to 10 years — 47 percent ranked this among the top three most transformative forces — beating out scientific innovation (38 percent).

The "Global Healthcare Leaders Study" polled 200 C-level executives and 100 investors from the U.S. and Europe, spanning three sectors of the healthcare industry: pharmaceutical and biotech, medical devices and technology, and healthcare services.

The survey revealed U.S. healthcare executives are more sensitive to the pricing and reimbursement challenges than their European peers, but perhaps slightly less convinced value-based care will be the solution. For example, 62 percent of U.S. healthcare executives ranked pricing pressure as a top concern, compared to 56 percent of European healthcare executives. Yet slightly more European executives polled — 49 percent — cited value-based care and risk-sharing models as a top transformative trend, compared to 41 percent of U.S. respondents.

Still, the majority of U.S. healthcare executives expect value-based care trends to continue in the years ahead. Fifty-five percent believe the majority of healthcare payments in the U.S. will be tied to value by 2020, according to the survey.

Read the full survey results here. 

Most healthcare CFOs say they lack resources to adapt to reform

The role of the chief financial officer at hospitals and other healthcare companies has evolved from managing financial risks to becoming a trusted strategic adviser.

Yet, a majority of CFOs feel they don't have the resources and tools necessary to meet their new responsibilities or adapt to the evolving healthcare landscape, according to a new survey from consulting firm Kaufman Hall.

Only 14% of survey respondents, which included 126 healthcare CFOs and senior finance executives, think they are prepared to manage the financial impact of healthcare reform with their current financial planning processes. In addition, just 19% of participants felt confident in their team's ability to adjust if business circumstances change suddenly. That's certainly a possibility as President-elect Donald Trump and the GOP-led Congress promise to repeal and replace the Affordable Care Act.

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31% of providers and 20% of employers have adopted healthcare bundles

We just saw this piece on Becker's Hospital Review that we wanted to share because at ValueIQ, we are increasingly seeing this trend in our client organizations.

Bundles are undeniably gaining traction in healthcare, with 83 percent of hospitals either interested in or already participating in these payments. However, there is still a "mismatch" between provider activity and employer needs, according to PwC's Strategy& annual bundled care survey of employers, hospitals and consumers.

The survey shows bundle adoption is at a critical turning point, and this "mismatch" creates great opportunity for those who can push bundles activity past the pilot stage.

The survey included 277 employers, 261 hospitals and 1,000 consumers.

Here are seven survey findings.

1. The survey found 31 percent of providers and 20 percent of employers have adopted bundles.

2. Sixty-three percent of hospitals have realized savings through bundles, and 69 percent improved quality through bundles.

3. The majority (55 percent) of consumer survey respondents found bundles easy to understand and appealing, picking a realistic bundle over current coverage 62 percent of the time.

4. Still, the survey found that employers want to see greater financial impact and a wide variety of bundles, whereas hospitals have kept efforts small.

5. The survey also found that hospitals are nearly exclusively offering bundles for a few acute conditions.

6. However, hospitals can commit to an at-scale bundles strategy, according to the survey, and payers and intermediaries can serve as industry aggregators.

7. Additionally, the survey shows, employers can guide bundle development to meet their needs and the needs of employees who value low-cost care combined with minimized travel.

More health systems launch insurance plans despite financial risk: 5 things to know

Health systems across the nation are exploring the benefits of vertical integration, and an increasing number of systems are choosing to offer their own health plans, according to a report by McKinsey & Company.

Here are five things to know about provider-led health plans, according to the report.

1. Between 2010 and 2014, the most recent year for which data is available, the number of providers offering health plans has steadily increased from 94 to 106.

2. Enrollment in provider-led plans grew to 15.3 million in 2014, up from 12.4 million in 2010. However, most provider-led health plans remain comparatively small in terms of enrollment. Only five healthcare providers owned plans that covered more than 500,000 lives in 2014.

3. Financial performance of provider-led plans remains mixed. Of the 89 plans analyzed for the report, more than 40 had negative margins in some or all of the past three years.

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PwC's Top Healthcare Concerns for 2016

In 2016, millions or American consumers will have their first video consults; be prescribed their first health apps and use their smartphones as diagnostic tools for the first time. 2016 also will be the year that many Americans, faced with higher deductibles, manage medical expenses with new tools and services rolled out by their insurance companies, healthcare providers, banks and other new entrants.

This will be the year that, shift by shift, visit by visit, nurses doctors and other clinicians learn to work in new ways, incorporation insights gleaned from data analysis into their treatment plan.

PwC’s Health Research Institute’s annual Top health industry issues report highlights the forces that are expected to have the most impact on the industry in the coming year, with a glance back at key trends from the past decade.

Learn more