Almost two-thirds of reimbursement models in the U.S. today are value-based and the cost curve is bending as a result, according to a new study commissioned by Change Healthcare.

These care models are cutting unnecessary medical costs by 5.6 percent on average, while simultaneously improving the quality of care and patient engagement.

"We’ve been publishing industry research since 2014, and this is the third study we’ve commissioned on value-based care," Robert Capobianco,VP of value-based payments at Change Healthcare, told HCB News. "What makes this study different is that we asked ORC International to see if payers are 'finding the value' in value-based care."

For the study, Finding the Value: The State of Value-Based Care in 2018, researchers at ORC International surveyed 120 payors. Nearly a quarter of them reported savings as high as 7.5 percent.

Almost 80 percent of them witnessed the quality of care improve. Sixty-four percent reported better provider relationships and 73 percent reported improvements in patient engagement.

Pure fee-for-service models are declining faster than previous studies projected. They only account for about 37 percent of reimbursement, and that's expected to drop below 26 percent by 2021.

The researchers also found that commercial lines of business are leading innovation and adoption for the first time.

"The government lines of business played a fundamental role in kick-starting adoption of alternative payment models. We saw this when the government mandated programs such as the Comprehensive Care for Joint Replacement Model," said Capobianco. "Commercial lines of business took this as a market signal and pushed forward with similar initiatives. The current administration has removed the mandates."

However, those gains are met with a set of challenges. Fifty-eight percent of payors are finding it extremely difficult to generate interest among providers to participate, agree on episode definitions, and reach a consensus on budget, risk/gain sharing and performance metrics.

Innovation agility also remains an issue. Only 21 percent of payors are capable of launching a new episode of care program in three to six months, and more than a third require up to a year.

"One of the interesting aspects of the study results is the amount of customization, coupled with the high level of homegrown or internally developed solutions," said Capobianco. "It turns out, unfortunately, that internally developed solutions take a long time to build, often have limited capabilities, and require a heavy staff investment to sustain them."

The marketplace has matured and there are now an array of episode definitions and analytics solutions that payors can use to scale their models and adapt to market changes more quickly.

"We’ve moved from a market where 'build' was the only option to one where 'buy' is now the sensible approach," Capobianco added.