Sluggish growth in value-based care reimbursement driving a strategic, risk-adverse approach

ANN ARBOR, MICHIGAN AND SALT LAKE CITY, UTAH, OCTOBER 1, 2020 – With value-based reimbursement (VBR) adoption slowing, healthcare providers are searching for ways to manage risk and achieve ROI on population health management (PHM) solutions adoption, according to a new report from KLAS Research and CHIME – the College of Healthcare Information Management Executives. The new report, issued today, found that providers are looking first to their electronic health record (EHR) systems to drive PHM, and are most interested in investing in new healthcare information technology (HIT) when they know there is a clear ROI.  This new Decision Insights report was based on findings from KLAS Decision Insights, the KLAS 2019 Population Health Management Cornerstone Summit, and CHIME’s 2019 HealthCare’s Most Wired data.

“The Digital Health Most Wired survey results help identify trends in the industry, high performing organizations/teams and opportunities to improve,” said Russell Branzell, CHIME’s president and CEO. “Digital Health Most Wired shows how industry-leading healthcare organizations are using data and analytical tools to support population health strategies and progress in their digital health strategies.” 

“Providers are trying to find positive ROI on their population health management investments,” said Adam Gale, president of KLAS Research. “This report offers a useful roadmap for how they can meet that challenge.”

Among the research findings:

VBR contracts now account for 26% of hospital revenue. Fee-for-service still outpaces VBR, and over time, the lack of significant progress toward VBR has eroded healthcare organizations’ confidence that the change will happen in the near future. The biggest factors limiting adoption of VBR are uncertainty that an ROI will be achieved and a lack of needed infrastructure.

Provider organizations look first to the EMR to drive PHM workflows. Though provider organizations may not ultimately choose their EMR for certain population health management (PHM) needs, EMRs are almost always considered, due to (1) assumed integration with EMR data; (2) anticipated cost savings; and (3) increased ease of access to PHM data in the EMR.

Organizations invest in HIT when there is a concrete ROI. Solutions that help organizations identify and act on care gaps see some of the broadest adoption as they can be helpful with just about any VBR contract. Once a gap is identified, organizations need to reach out to the patient and close it, so patient engagement tools are also highly sought after.

Functionality is a significant driver in PHM purchase decisions.  Healthcare organizations are looking for enterprise EMRs and broad BI platforms capable of tackling a large swath of their PHM and VBR-related functionality needs (e.g., root cause analysis, A/B testing, etc.). In this quest for consolidation, organizations are seeking to eliminate ad hoc interfaces and replace vendors who haven’t delivered on functionality or quality.

KLAS Decision Insights conveys the future plans of current and potential customers in a given market segment. When a provider organization reports they have made a solution change in the last 12 months or plan to do so in the next 24 months, that decision is captured in the form of Decision Insights data. Decision Insights data does not represent a comprehensive census or win/loss market share study. Rather, it is intended to help provider organizations understand which vendors have market energy and why.


The College of Healthcare Information Management Executives (CHIME) is an executive organization dedicated to serving chief information officers (CIOs), chief medical information officers (CMIOs), chief nursing information officers (CNIOs), chief innovation officers (CIOs), chief digital officers (CDOs) and other senior healthcare IT leaders. With more than 3,400 members in 55 countries and over 150 healthcare IT business partners and professional services firms, CHIME provides a highly interactive, trusted environment enabling senior professional and industry leaders to collaborate; exchange best practices; address professional development needs; and advocate the effective use of information management to improve the health and care in the communities they serve. For more information, please visit chimecentral.org.

About KLAS

KLAS is a research and insights firm on a global mission to improve healthcare delivery. Working with thousands of healthcare professionals and clinicians, KLAS gathers data and insights on software, services and medical equipment to deliver timely, actionable reports and consulting services. KLAS represents the provider and payer voice and acts as a catalyst for improving vendor performance, highlighting healthcare industry challenges and opportunities, and helping build understanding and consensus for best practices. To learn more about KLAS, go to klasresearch.com.

Candace Stuart
Director of Communications and Public Relations, CHIME
[email protected]

Joshua Schneck
PR Counsel for KLAS