What’s Driving the Meteoric Growth of Non-Alcoholic Craft Brews?

What’s Driving the Meteoric Growth of Non-Alcoholic Craft Brews?

There is nothing better on a hot summer day than reaching for an ice-cold brew. With growing frequency, the craft brew people reach for is missing one key ingredient – ethanol a.k.a. alcohol. The non-alcoholic craft brew market has been growing at warp speed, even as beer sales decline. What is propelling this expansion and what comes next? Let’s take a look.

Non-alcoholic brews have been around for decades but never picked up much steam. There were stigmas attached, identifying its drinkers as those with or recovering from alcohol issues. Perhaps a bigger problem was the fact that they just didn’t taste good. Over the last five years, however, evolving societal norms and craft brewers have changed all of that.

Now, the “sober curious” have embarked on finding great-tasting adult beverages without the alcohol. They want the social side that comes with imbibing, minus the hangover (and potential legal risks).

Younger generations – Millennials and GEN Zers – have turned values on their head with things like not living to work but instead working to live. They also don’t readily associate drinking with being cool.

Those who make fitness and health cornerstones of their lives appear to feel better about imbibing without the buzz, even touting non-alcoholic brews’ potential restorative health powers. Some assert it’s the same as or better than sports drinks following a workout, with research pointing to benefits like less inflammation, improved immunity, and good hydration. (Reynolds, Gretchen. “Why non-alcoholic beer beats regular beer after exercise.” January 25, 2023. The Washington Post.) For fitness enthusiasts, there are other perks such as no hangover, fewer calories, natural ingredients, and, with growing frequency, great taste.

A paper published in the National Library of Medicine last year, entitled: “Features of Non-Alcoholic Beer on Cardiovascular Biomarkers. Can It Be a Substitute for Conventional Beer?” reviews several studies showing the potential benefits of drinking non-alcoholic brews, including decreased cardiovascular risks and mortality; positive antioxidant effects; additional benefits over water for those with non-alcohol related cirrhosis of the liver; and ischemic heart disease benefits. It does point out that current knowledge is limited, but simultaneously opens the door to continued exploration of the link between health and non-alcoholic brews. (Sancen, Marco; Leniz, Asier; Macarulla, Maria Teresa; Milton-Laskibar, Inaki; Portillo, Maria; and Estruch, Ramon. December 30, 2022)

Just as craft brewing created its own market and following, inviting fans to enjoy a myriad of recipes, processes, and tastes, the non-alcoholic craft brew market appears to be on the same track. In addition to breweries and retail stores, there are a growing number of non-alcoholic bars and restaurants featuring non-alcoholic menu selections. Recently, the first major U.S. airline signed on to offer non-alcoholic brews.

Actual financial performance shows this market has serious uphill momentum. The Brewers Association’s publication, The New Brewer’s January-February issue reports: “Craft non-alcohol beer was scarcely a category five years ago. Now it’s a hot commodity, propelling the once-moribund NA beer segment to grow 31.7%.”

CNBC reports, “With more consumers choosing non-alcoholic beers in a move towards healthier drinking alternatives and safer drinking habits, the global non-alcoholic beer market has grown to $22 billion in 2022, according to GMI Insights, which projects that could reach $40 billion by 2032. According to Nielsen, non-alcoholic beer grew 20% in the U.S. in retail dollars in the past year.”

Beverage Industry’s 2023 State of the Beverage Industry says, “Although a smaller segment in the overall U.S. beer category, non-alcohol beer increased 22.8% for the 52 weeks ending May 21 in total U.S. multi-outlets for a total of $308.7 million. Case sales also increased double digits with an 11.6% increase.” While inflationary pressures are expected to slow growth in the coming years, the market still has plenty of opportunity ahead. (Jacobsen, Jessica. “2023 State of the Beverage Industry.” July 6, 2023. Bevindustry.com.)

No doubt, we are still in the early chapters of this market’s story. Whether you’re considering the role your business will play in non-alcoholic brews or the impact it will have on your story, please know RBT CPAs are here to support your accounting, tax, audit, and business advisory needs. To learn more, give us a call today.

 

RBT CPAs do not outsource work to any other country. All of our work is prepared in the U.S.A.

What’s Happening with Prefab and Modular Construction Today

What’s Happening with Prefab and Modular Construction Today

It’s always interesting for an accountant who specializes in the construction industry to deep dive into trending topics. I’ve come to learn that when you Google a research topic, the first five screens of search results paint one picture that almost feels like marketing to get a new trend to catch on. Moving further into search results and asking different questions usually uncover a flip side to stories that often challenge or raise questions about mainstream messaging. To be honest, this is the case when taking a deep dive look at what’s happening with prefab and modular construction.

I was surprised to learn prefab and modular construction have been around for quite some time. Some claim its roots were planted in the 1600s, while others say it really started to take off in the early 1900s when Sears started selling prefab homes. Fast forward to 2014 and we can see how far the industry has come when the first prefab hotel was built in New York City. Still, it’s not a new concept; it has been around for a while and is taking time to gain traction and momentum.

The continuing labor shortage, escalating climate issues, and a growing housing shortage provide solid reasons to explore how to do construction differently. Prefab and modular building seem to be finding its footing when it comes to multi-family housing, healthcare and education facilities, and more. While there’s no doubt prefab and modular construction will have its place, it’s hard to tell exactly how much of a role it will play in the future.

On the plus side, many sources point out that prefab and modular construction can lower costs, reduce project timelines, increase worker safety, deliver higher quality, reduce waste, and be more environmentally and climate-friendly. They also have a role to play when responding to crisis, like when additional hospital spaces were needed quickly as the COVID emergency ramped up. Plus, there’s an opportunity following severe weather or climate events like hurricanes or fires to help hasten rebuilding efforts at reasonable costs. Add the reduced noise, dust and neighborhood impact while constructing, plus the ability to use more newer materials put together in a controlled environment, and prefab and modular seem hard to beat.

Still, a number of questions remain. For example, the lack of standardization and regulations may increase costs and time associated with putting prefab and modular units together, pretty much eliminating any time or cost savings. There are extra steps involved in quality control, with pieces needing to be inspected both before and after transport, not to mention once the construction is done. Apparently, connecting utilities can present issues, as can the upfront coordination between all of the parties that need to be involved. Requirements to pay prevailing wage on public projects may automatically exclude prefab and modular options. Plus, last minute requests and changes can be difficult to accommodate.

Even in the face of these and other questions, prefab and modular building appear to have a growing role to play in the industry. When it comes to North America, Modular Building Institute’s 2023 Modular Construction Industry Annual Report’s executive summary notes permanent modular construction reached $12 billion in 2022 and accounted for 6.03% of new construction starts. According to Global Market Insights, the “Modular and prefabricated construction market size surpassed USD 147 billion in 2022 and is anticipated to register  6.5% CAGR  from 2023 to 2032.”

As you consider what prefab and modular may mean to your business and future plans, you can count on RBT CPAs to keep an eye on your accounting, tax, audit, and business advisory needs. Interested in learning more? Give us a call.

 

RBT CPAs is proud to say all of our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

How Small and Medium Manufacturers Can Adopt Innovation 4.0 Without Breaking the Bank

How Small and Medium Manufacturers Can Adopt Innovation 4.0 Without Breaking the Bank

Big manufacturers have the money and resources to embrace the many different technologies and capabilities that make up Innovation 4.0, while small and medium businesses may be challenged to simply keep the day-to-day going in an uncertain economic environment, much less take on the task of investing time and resources to build their tech stack. One consideration: it doesn’t have to be an all or nothing proposition.

Technology that makes up Innovation 4.0 (also referred to as Manufacturing 4.0 and smart manufacturing, among other monikers) can help address labor challenges now and in the future. Adopters are finding technologies increase productivity and safety; operate in a more environmentally friendly manner; hasten product development; promote quality; reduce downtime with predictive maintenance; and save time on a variety of other business-related tasks ranging from marketing and invoicing to recruiting and more.

Manufacturing.net reports, “The return on investment of Industry 4.0 can be very high, with a McKinsey report suggesting that the addition of AI and automation technology can lead to 30 to 50 percent reduction in machine downtime; 10 to 30 percent increase in throughput; 15 to 30 percent improvement in productivity, and 85 percent increase in forecasting accuracy…Manufacturing companies that achieve even the lower end of these potential business gains stand to recover their initial expenses very quickly.” (Kumin, Roland. Five Common Myths About Industry 4.0. August 9, 2023. Manufacturing.net.)

Many sources indicate you don’t have to start with a major overhaul that disrupts operations; progress can be made in phases and by doing more with the equipment you already have.

According to Mfgtec.org, “Many of us know that automation is a great way to help increase efficiency in your manufacturing processes. However, not everyone can afford state-of-the-art machinery or robotics. When it comes to inexpensive automation machines, there are several options available that can help streamline manufacturing processes without breaking the bank.” (Timoldi, Daniel. Affordable automation options for manufacturers looking to increase productivity. June 28, 2023. MFGtec.org.)

An article in IndustryWeek.com notes, “The beauty with implementing these technologies is that they build on each other, one investment leading into the next… Manufacturers shouldn’t think twice about simply diving in, researching certain technologies and figuring out how to implement within their companies… A step-by-step approach also allows leadership to gain greater understanding of often complex technologies and systems, snowballing into more successful implementations as time goes on (Karp, Ethan. Digital Transformation on a Small Business Budget: It Can Be Done. February 2, 2023. Industryweek.com.)

The Manufacturing.net article referenced earlier points out, “Modular smart manufacturing platforms are highly flexible and scalable. For example, you can start with a solution to enable predictive maintenance first, before adding another module to automate production orders, then another to capture and analyze quality data, and so on. A good Industry 4.0 platform integrates seamlessly with your existing processes and equipment to automatically capture data, build digital twins, and generate valuable insights. It can also be upgraded as business growth allows.” (Kumin, Roland. Five Common Myths About Industry 4.0. August 9, 2023. Manufacturing.net.)

With so many technology solutions available, it can be challenging to determine where to start or how to proceed; however, there are organizations and resources that can help:

To free you up to focus on your business and technology strategy, RBT CPAs is here to offer you peace of mind that your accounting, audit, tax, and business advisory needs are covered. We’re a leading accounting firm in the Hudson Valley, dedicated to exceptional customer service and upholding the highest levels of integrity. To learn what we can do for you, give us a call.

 

RBT CPAs is proud to say all of our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

Grants, Free Resources and Other Support to Stand Up to Cyber Attacks on Schools

Grants, Free Resources and Other Support to Stand Up to Cyber Attacks on Schools

Cybercriminals beware! As we gear up for back to school season, the White House, Federal agencies, companies, and local administrators and educators are teaming up to shore up plans, resources, and protocols to help school districts across the U.S. stand up to cybercrime.

A lack of resources and infrastructure have made schools the number one target of cyber criminals. One report puts the cost of responding to a cyberattack at $50,000 to $1 million. Attacks also lead to lost classroom time, cancelled exams and school closures, not to mention the employee and student data that’s at risk.

In a recent press release, U.S. Secretary of Education Miguel Cardona said, “Let’s face it: in today’s digital age, our students and their teachers will increasingly use technology in the classroom. Schools have access to more devices and connectivity than ever before, and this technology in education has incredible potential to help students better connect with their learning and achieve, and teachers better engage with their students, but to make the most of these benefits, we must effectively manage the risks. Just as we expect everyone in a school system to plan and prepare for physical risks, we must now also ensure everyone helps plan and prepare for digital risks in our schools and classrooms.”

To that end, Federal, corporate, and local resources are joining forces to help school districts stand up to cybercrime:

  • On August 7, the White House brought together educators, administrators, and companies to discuss best practices and resources outlined in “K-12 Digital Infrastructure Brief: Defensible and Resilient,” a publication from the Office of Educational Technology and the Cybersecurity and Infrastructure Security Agency (CISA).
  • A Government Coordinating Council (GCC) is being created by the Department of Education and Homeland Security to facilitate collaboration; coordinate cybersecurity activities, policy, and communications in schools; and support district efforts to prepare for, respond to and recover from cyberattacks.
  • The Federal Communications Commission has proposed a three-year pilot program providing up to $200 million to reinforce cyber defenses in K-12 schools and libraries.
  • CISA will assess cybersecurity at 300 K-12 entities in the 2023-2024 school year and provide cyber security training. (That’s in addition to the support already provided to teachers to incorporate cybersecurity into lesson plans and make schools safer.)
  • The Federal Bureau of Investigation and National Guard Bureau will provide guidance on how to report cyber incidents at schools and obtain support from federal cyber defense programs.
  • Amazon Web Services (AWS) committed $20 million to fund cyber grants for K-12 school districts and state departments of education. Applications are being accepted now. (Be prepared to describe the number of students served in the district, as well as the scope and goals of the cyber security project.) Click here to apply. In addition, AWS will provide free security training to K-12 IT staff via AWS Skill builder; free cyber incidence response assistance if a district is attacked; and free security reviews for U.S. education technology companies providing mission-critical K-12 applications.
  • Cloudflare committed to offer free cybersecurity solutions to districts with less than 2,500 students as part of its Project Cybersafe Schools. For more details and to apply, click here.
  • Google created a new K-12 Cybersecurity Guidebook providing best practices and guidance for IT administrators on how to set up and configure hardware and software to strengthen cybersecurity in K-12 schools.
  • PowerSchool committed to providing free and subsidized security-as-a-service webinars, toolkits and training to districts and schools, while D2L committed to increase access to training, launch a cybersecurity user community, and more.

While you’re waiting to learn about next steps, it may be a good time to catch up on some summer reading before the start of school:

As you focus on building your district’s cyber defenses, you can count on RBT CPAs to focus on your audit, tax, accounting, and advisory service needs. Interested in learning more? Give us a call.

 

RBT CPAs is proud to say all of our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

Big Business Benefit Cuts May Open New Opportunities for Small Businesses

Big Business Benefit Cuts May Open New Opportunities for Small Businesses

After several years of enhancing rewards to attract and retain talent in one of the tightest labor markets ever, large and medium-sized employers are cutting perks, benefits, and staff with increasing frequency, possibly creating an opportunity for small businesses to level the recruiting and retention playing field.

The list of large employers cutting staff is growing by the day. Along with staff, perks (a.k.a. free food, on-site massages, laundry services, and on-site wellness classes, for example) and benefits are on the chopping block as big businesses try to reign in expenses to prepare for a possible recession.

Care.com’s 2023 Future of Benefits Survey found 95% of survey participants (with 500 or more employees) are “recalibrating” benefit strategies and 47% are cutting back on benefits this year. Adoption/fertility benefits; commuter benefits; financial education and wellness; health and fitness discounts; home office stipends; and learning and development programs are most likely to be cut.

What about small businesses? According to the Bank of America 2023 Small Business Owner Report, over half of small businesses that participated in a survey (53%) indicated they have added benefits and perks to retain current staff (i.e., 34% added remote/hybrid work; 34% provided cost of living bonuses; and 33% increased vacation time). To attract new talent, more than half (54%) increased base pay; over one quarter (27%) are providing additional healthcare benefits; and 27% added training and resource groups.

Why would a small business do this during a time of economic uncertainty? 51% of owners indicated they’re still feeling the impact of labor shortages, with 49% working more hours; 33% having a hard time filling jobs; 31% increasing wages to attract talent; 26% having to change their business hours; 24% reducing products and services offered; and 21% indicating they’re losing customers due to staffing issues.

Interestingly, all of the data is coming together to put a spotlight on a potential recruiting and retention opportunity for small businesses. The Morgan Stanley at Work report indicates almost 70% of employees are paying more attention to financial benefits and almost 90% “would be more invested in staying at their company if it provided financial benefits that met their needs.” Under SECURE 2.0, an eligible small business may receive a tax credit for up to 100% of startup costs for certain types of retirement plans (i.e., SEP, SIMPLE IRA, or a qualified plan like a 401(k)). The maximum credit is $5,000 for three years; eligibility and other criteria apply.

Interested in learning more? Give us a call. Our RBT CPAs professionals, alongside those from our strategic partner Spectrum Pension and Compensation, can help you evaluate whether SECURE 2.0 Act credits can help you strengthen your rewards offerings and, ultimately, your ability to attract and retain talent.

 

RBT CPAs is proud to say all of our work is prepared in the U.S.A. – we never offshore. As a result, you get peace of mind that your operation’s financial and confidential information is handled by full-time, local staff who have met our high standards for quality, ethics, and professionalism.

NOTE: RBT CPAs is providing this content for informational purposes only; it should not be considered advice. Since every business is different, it’s best to consult a professional (like Spectrum) and/or benefits legal counsel to determine whether new benefit plans and/or benefit changes may be advantageous for your organization.

This Is Your Chance to Tell HUD How to Simplify Program Administration: Deadline August 14

This Is Your Chance to Tell HUD How to Simplify Program Administration: Deadline August 14

Do you have ideas about how to make U.S. Housing and Urban Development (HUD) forms and application processes easier? How about insights on ways to reduce burdens on vulnerable groups like people with disabilities or limited English proficiency? Based on your experiences, is there data and information that should be shared with the public or between agencies? Do you have thoughts on how to use automation and artificial intelligence to improve HUD processes? If so, HUD wants to know!

In mid-July, HUD issued a Request for Information (RFI). Its focus? How the agency can make programs easier to access and use. In addition to beneficiaries of HUD programs and the public, the agency is seeking input from administrators including public housing agencies, state or local governments, housing providers, Tribes, and social service providers. The deadline to submit comments is approaching fast. If you have thoughts, ideas, and opinions to share, make sure you do so by Friday, August 14.

According to the RFI, “While HUD is interested in input from all commenters, comments from organizations that provide direct assistance to individuals navigating application, reporting, and recertification processes, as well as individuals’ direct experience completing and submitting forms, may be particularly helpful in identifying both unduly burdensome processes as well as opportunities for mitigating those burdens.”

You (and your team) have the option to submit comments (or attach documents with comments) via:

  • Online at Regulations.gov. Click here.
  • Regulations Division, Office of General Counsel, Department of Housing and Urban Development at improvingaccesstopublicbenefitprograms@hud.gov.
  • Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410–0500.

Comments should include the RFI docket number and title: “FR–6381–N–01 Improving Access to Public Benefit Programs; Request for Comment,” and indicate which of the five questions posed in the RFI you are responding to. Questions focus on how to reduce administrative burdens across HUD’s programs; data sharing; and automating, augmenting, and streamlining forms and processes. (Scroll down in the RFI to see the detailed questions.) It is important to note that the comments are public.

While you and your team are sharing your thoughts, ideas, and opinions on how HUD can do things better, you can count on RBT CPAs for all of your accounting, tax, audit, and advisory needs. To learn more, give us a call today.

 

RBT CPAs do not outsource work to any other country. All of our work is prepared in the U.S.A. 

When Business Slows Down, New York’s Shared Work Program Helps You Retain Valued Employees

When Business Slows Down, New York’s Shared Work Program Helps You Retain Valued Employees

Perhaps the only thing harder than finding valued employees these days is having to lay off employees when business slows down. The New York State Department of Labor (NYS DOL) has a long-standing program that gives you an alternative to lay-offs. It’s called The Shared Work Program. Here are some highlights…

Who Is Eligible?

If you have two or more full-time employees in NYS; you have paid into unemployment insurance for at least four consecutive calendar quarters; and participation helps your organization avoid layoffs, you are eligible to apply.

What Is the Shared Work Program?

Rather than lay off valued talent during a slow period, the program allows you to reduce hours across the board for all employees or within a defined workgroup. Employees who are impacted can make up a portion of lost wages due to a reduction in hours via unemployment insurance.

For example, let’s say work is slowing down. Rather than lay off employees in the XYZ department, you file a Shared Work Plan with the NYS DOL and receive approval to reduce XYZ employees’ hours 20% for 10 weeks. Impacted employees can file for Unemployment Insurance and collect 20% of their weekly benefit. (That’s in addition to the reduced pay they receive from you for working the reduced hours.) As a result, the employees have more income than if they were laid off, and you have a valuable way to retain employees.

When should I get the process started?

Reach out to the Shared Work Program less than one month before the proposed start date. You’ll use that time to create a Shared Work Plan and apply for program approval.

Where can I learn more and apply?

For program details – including FAQs, informational videos, a program fact sheet, references from organizations and employees who have benefited from the program, how to apply, and more, click here.

Why does the NYS DOL offer this program?

This win-win program supports organizations during challenging times by helping them retain valued employees. At the same time, it helps employees stay employed and make up a portion of wages lost due to a reduction in hours.

How?

Develop a Shared Work plan and then apply online. You’ll be assigned a dedicated representative to help guide you. Approvals are granted within 48 hours and can be adjusted weekly. Once business picks up, you can quickly resume normal operations with the same employees you have come to count on…and who knows they can count on you.

 

We hope this reminder proves useful. Please know you can always count on RBT CPAs for all your accounting, tax, audit, and advisory needs. To learn more, give us a call today. RBT CPAs does not outsource work to any other country. All of our work is prepared in the U.S.A. 

Power Your Small Business with Energy Tax Credits, Incentives, and More

Power Your Small Business with Energy Tax Credits, Incentives, and More

If you have been thinking about upgrading your business facility or vehicle, there is no better time than the present.

Today’s tax laws and resources can help your small business reduce energy and maintenance costs; create a more comfortable and productive work environment; reduce your carbon footprint; and enhance your brand.

The Federal Inflation Reduction Act (IRA) provides tax credits for operating more efficiently and cleaner. New York state offers tax credits and numerous clean-energy programs. Add to that the incentives, special services, and financing available through energy-related providers and your small business may find significant energy and monetary savings. (Of course, eligibility criteria apply.) For example…

For New Construction or a Retrofit (addition of something new to something old) of a Qualifying Energy Efficient Commercial Building

With the IRA’s Energy Efficient Building Deduction (a.k.a. 179d), when construction or updates reduce annual energy and power costs by at least 25%, and prevailing wage and apprenticeship requirements are met, your business can receive a deduction of $2.50/square foot. For each additional percentage that annual energy and power costs are reduced, the deduction increases by $.10, with the maximum deduction being $5/square foot (up from $1.88 in 2022).

Lighting

One of the easiest ways to save energy (and money) is to upgrade to energy efficient lighting. Some LED solutions can save you up to 90% on energy related costs and some solutions can last up to 25 years without replacement. What’s more, if you make this part of new construction or a retrofit, upgrades may qualify for IRA deductions.

Building Envelope

Everything that goes into creating the shell of your building – walls, roofing, foundation, doors, and windows – is considered part of the building envelope. Improve temperature control, air quality, and condensation with building envelope updates like weatherstripping windows and doors, increasing insulation, and air leak sealing. Not only will your building be more comfortable, but you can also lower energy and operating costs, and possibly take advantage of IRA deductions.

Heating, Ventilation and Air Conditioning (HVAC)

Upgrading to a high-efficiency system can improve energy performance, especially if current equipment is more than 10 years old or malfunctioning. New clean heating and cooling systems not only save on energy, but also help your business reduce its carbon footprint. Plus, they have longer lifespans than older systems and provide more accurate temperature control. Make this part of a new construction project or retrofit to qualify for IRA deductions.

Solar

One of the cleanest energy options is solar. Businesses that adopt it can save up to 30% on installation costs with IRA tax credits, while potentially reducing energy costs by 75%. If interested, get started soon as these tax credits begin to phase out in 2033. In addition, New York offers solar tax credits (for the lower of $5,000 and 25% of installation costs). If your business is eligible for both the IRA and NY credits, you can reduce installation costs by more than 50%.

Vehicles

With the IRA’s Clean Vehicle Tax Credit, your business may qualify for up to a $7,500 credit for a plug-in EV or fuel cell electric vehicle (vehicles 14,000 pounds and over may qualify for up to a $40,000 credit). In addition, for cars, you may qualify for a $2,000 rebate under the Charge NY initiative, bringing your total potential tax credit to $9,500.

 

If you’re not sure where to start, numerous resources (including energy audits) are available through New York State and local utility providers (i.e., NYSEG, Orange & Rockland, or Central Hudson). Learn more about the many programs available to help your business operate greener and cleaner at https://www.nyserda.ny.gov/PutEnergyToWork/Industry-Energy-Solutions/Small-Business.

The Many Sides to the Value-Based Care (VBC) Discussion

The Many Sides to the Value-Based Care (VBC) Discussion

Value-based care is being trumpeted as the panacea to cure all of the healthcare systems’ ills, and while it’s picking up momentum, to say there are a lot of different perspectives to this story is a gross understatement.

From medical and political organizations to investors and technology companies, value-based care is the talk of the town.

Value-based care was first introduced by Michael Porter and Elizabeth Olmsted Teisberg in their 2006 book, Redefining Health Care: Creating Value-Based Competition on Results. Since then, it has been embraced by some; criticized by others. Still, after almost 17 years, the discussion continues. In scouring numerous publications from several months, here’s a sampling of the discussions…

December 16, 2022. American Psychological Association

“The National Academies of Science, Engineering, and Medicine issued a report on implementing high-quality primary care stating that we should ‘pay for primary care teams to care for people, not doctors to deliver services.’ The report recommends a shift towards a hybrid model of payment; part fee-for-service and part capitated (per member, per month) as the default method to pay prospectively for interprofessional, integrated, team-based care rather than the fee-based system that undervalues the work reflected in primary care and behavioral health services.” (“APA advocates for value-based payment models.” December 16, 2022. APAServices.org.)

December 16, 2022. McKinsey & Company

“Providers specializing in value-based care have become attractive to investors because of the distinctive quality of care that they can provide and the investable opportunity they present, with a diversity of risk levels and business models. By building on a decade of increasing value-based payment adoption—combined with enhanced value-based capabilities across payers, providers, employers, and other healthcare stakeholders—continued traction in the value-based care market could lead to a valuation of $1 trillion in enterprise value for payers, providers, and investors.” (Abou-Atme, Zahy; Alterman, Rob; Khanna, Gunjan; and Levine, Edward. “Investing in the New Era of Value-Based Care. December 16, 2022. Mckinsey.com.)

February 7, 2023. The Commonwealthfund.org

“Studies of value-based care programs so far suggest that they can reduce costs and improve quality of care, although results have often been mixed and impact modest….Although participation in value-based care programs is on the rise in the U.S., many healthcare providers are still not in one. To encourage participation, future models in both the public and private sector would likely benefit from being more accessible and financially rewarding, particularly to those serving disadvantaged or rural populations. Moreover, further research is needed about how these programs impact patients, providers, and the health care system overall, as well as which factors are associated with success.” (Lewis, Corinne; Horstman, Celli; Blumenthal, David; Abrams, Melinda K. “Value-Based Care: What It Is and Why It’s Needed.” February 7, 2023. Thecommonwealthfund.org.)

Feb 10, 2023. Healthcare Dive

“With 48% of the eligible Medicare population enrolled in Medicare Advantage plans and, the CMS committed to having 100% of enrollees in a value-based care program by 2030, the tailwinds are pushing at-risk arrangements forward in a big way.” (Kirk, Liz. “Tipping point is in sight: Value-based care is driving meaningful financial results.” February 10, 2023. Healthcaredive.com.)

March 14, 2023. BenefitsPro

“Employers and their benefits consultants are increasingly embracing value-based reimbursement models as they – along with provider organizations, commercial payers, and government programs – seek more ways to improve health outcomes while reducing costs.” (Sharma, Rahul and Caroll, Lynn. Implementing value-based health care: Key trends shaping 2023.” March 14, 2023. Benefitspro.com.)

April 10, 2023. Bain.com

“There is still ample headroom for growth in value-based care adoption in the PCP space. As of 2021, nearly 60% of healthcare payments had at least some linkage to quality and value, but less than 20% incorporated two-sided risk (and capitated models are still under 8% of spending)…Our analysis suggests fee-for-value arrangements will capture 15%–20% market share from traditional FFS providers in primary care by 2030, creating strong macro tailwinds and supporting further investment in the space.” (Fry, Sharon; Nierenberg, Dave; Wynn, Grace; Murphy, Kara; and Jain, Nirad. “Value-Based Care: Opportunities Expand.” April 10, 2023. Bain.com.)

April 29, 2023. The American Journal of Managed Care

“…there have been many iterations of value-based programs sponsored by both government insurers and private companies… Among other challenges, a main issue that arises in value-based care surrounds attribution, meaning a patient is attributed to a provider and that provider is reimbursed based on the contract. But what is attribution? If a patient sees 2 primary care providers within a year, which provider is paid for their care?” (McNulty, Rose. “Value-Based Care: Is It Possible for All Providers to Succeed?” April 29, 2023. AJMC.)

May 8, 2023. The New York Times

“Large health insurers and other companies are especially keen on doctors’ groups that care for patients in private Medicare plans…Now, nearly seven in 10 of all doctors are either employed by a hospital or a corporation, according to a recent analysis from the Physicians Advocacy Institute…Insurers say their purchase of medical practices is a step toward what is called value-based care…” (Abelson, Reed. “Corporate Giants Buy Up Primary Care Practices at Rapid Pace.” May 8, 2023. NYtimes.com.)

May 23, 2024. Beckers ASC Review

“Three key driving forces behind the shift to value-based care are government programs and incentives, advancements in technology, and the use of data to gather information. The model has piqued the interest of companies such as CVS Health, Optum, and Amazon, as well as physician groups…Though value-based care’s popularity is growing, just 14 percent of physicians participate in the payment model, according to Medscape’s 2023 ‘Physician Compensation Report.’ The fee-for-service model is still the most popular payment model by a long shot, with 46 percent of physicians participating in it.”  (Hatton, Riz. “How value-based care is squeezing its way into every corner of healthcare.” May 23, 2024. Bekersasc.com.)

June 8, 2023. Center for Medicare and Medicaid Services

“Today, the Centers for Medicare & Medicaid Services (CMS) announced a new primary care model – the Making Care Primary (MCP) Model – that will be tested under the Center for Medicare and Medicaid Innovation in eight states… Colorado, Massachusetts, Minnesota, New Jersey, New Mexico, New York, North Carolina, and Washington.” (“CMS Announces Multi-State Initiative to Strengthen Primary Care.” June 8, 2023. CMS.gov.)

No doubt, this discussion is to be continued. While you are following the latest headlines shaping the future of healthcare in America, you can count on RBT CPAs to take care of your accounting, tax, audit, and advisory needs with the highest ethical and professional standards. To learn more, give us a call today.

 

RBT CPAs does not outsource work to any other country. All of our work is prepared in the U.S.A. 

Cybersecurity Update: The Latest Plans, Threats, and Resources

Cybersecurity Update: The Latest Plans, Threats, and Resources

Well, I don’t think we have to take up time convincing anyone that cybercrime is increasing and municipalities are attractive targets (after healthcare and education, local government is the most frequent target for cybercriminals, according to KnowBe4.com). What is mind-boggling is that the threats have morphed from being attributable to a lone computer genius in a back room somewhere into international gangs with names like Clop, Cuba, Royal, REvil, Evil Corp, and DarkSide. I mean, when all of this started, who would have thought that someone in a U.S. town or school office could be targeted by a Russian gang in cyberspace?! Well, they can.

All of this has spurred a more coordinated and collaborative approach to addressing cybersecurity at the federal, state, and local government levels, alongside private enterprise. At the end of last year, the 2023 omnibus spending agreement included $2.9 billion for the Cybersecurity and Infrastructure Security Agency (CISA), as well as $1.6 billion for the National Institute of Standards and Technology (NIST). What’s more, the federal Joint Ransomware Task Force (JRTF) was formed to combat the growing and ongoing threat of ransomware attacks.

We entered 2023 with $35.2 million in new funding to support New York’s statewide cybersecurity and use of shared services to identify potential security gaps (that’s in addition to the $61.9 million allocated for cybersecurity in the 2023 state budget). The State Division of Homeland Security and Emergency Services began creating a first-of-a-kind specialized industrial control system (ICS) assessment team to boost the security and resilience of critical infrastructure and manufacturing systems against cyberattacks.

With small businesses and municipalities at a disadvantage when it comes to standing up to cyber criminals, in March, the White House introduced the National Cybersecurity Strategy with an emphasis on the importance of industry and government cooperation. It notes:

“Malicious cyber activity has evolved from nuisance defacement to espionage and intellectual property theft, to damaging attacks against critical infrastructure, to ransomware attacks and cyber-enabled influence campaigns designed to undermine public trust in the foundation of our democracy.

Once available only to a small number of well-resourced countries, offensive hacking tools, and services, including foreign commercial spyware, are now widely accessible. These tools and services empower countries that previously lacked the ability to harm U.S. interests in cyberspace and enable a growing threat from organized criminal syndicates…Together, industry and government must drive effective and equitable collaboration to correct market failures, minimize the harms from cyber incidents to society’s most vulnerable, and defend our shared digital ecosystem.”

I’d say perhaps the author was watching a little too much Star Wars or Star Trek when that was written but, unfortunately, the situation really is that dire. Just consider what happened in Dallas, Oregon, and Oakland earlier this year.

IBM Security’s 2023 Cost of a Data Breach Report analyzed 552 data breaches across 17 industries and 16 countries and found phishing remains the top form of cybercrime, occurring 16% of the time. Compromised credentials came in a close second at 15% and cloud misconfiguration led to 11% of breaches. Data stored in public, private, or hybrid cloud environments were connected to 82% of breaches. Each public sector breach costs an average of $2.6 million. (Teale, Chris. “Public Sector Slow to Respond to Cyberattacks, Report Finds.” July 25, 2023. Route-fifty.com.)

According to Route-fifty.com, “IBM found that 19% of public sector agencies make ‘extensive use’ of security driven by artificial intelligence and automation, which can reduce staff workload, increase efficiency and save money. The company found that the approaches could save organizations in the public or private sectors around $1.7 million in data breach costs and 108 days in time identifying and containing a breach.’

“In addition to investing in automated security tools, IBM urged organizations across all sectors to build security into every stage of software development and deployment, modernize their data protection practices across the hybrid cloud, and understand their attack surface so they can be better prepared.”

All of this feels like we’re moving in the right direction. Still, just last week, Smartcitiesdive.com shared a warning from NY state officials that cyber threats to critical infrastructure are growing. So, this story will definitely be continued. In the meantime, an abundance of resources is available to support and guide New York municipalities’ cybersecurity efforts:

While you focus your resources and time on cybersecurity, you can trust RBT CPAs to handle your accounting, audit, tax, and advisory service needs. To learn more, give us a call today.

 

RBT CPAs does not outsource work to any other country. All of our work is prepared in the U.S.A.