Population Health Management: A good idea but …

Despite a widespread belief among C-suite executives that population health initiatives are crucial to future growth and survival, results from an annual study on the evolution of U.S. population health management indicates a high degree of inertia. “The State of Population Health: Fourth Annual Numerof Survey Report,” conducted by Numerof & Associates and Dr. David Nash, Dean of the Jefferson College of Population Health, suggests that as value-based models of care become the standard, population health management strategies will be necessary for delivering quality care less expensively. Yet, movement appears to be slow.

More than 500 C-suite healthcare executives participated in the online survey. Their  responses seem to indicate that progress on implementing population health as a model for organizing healthcare delivery has stalled – even though 94 percent of respondents rated population health management moderately (12 percent), very (42 percent), or critically (40 percent) important. The report also contains feedback from a select number of executives who answered open-ended questions developed around the online survey results.

Key findings from the report include the following:

· Just over 60 percent said their organizations were at least moderately prepared to manage the cost and quality of care, unchanged from 2017. Respondents’ median assessments of how well their organizations manage variation in cost were average (4 out of 7) and slightly above average (5 out of 7) for quality, both unchanged from 2017.

· Less than half of respondents reported that their organizations routinely used a process to identify outliers in cost and quality at the physician level or had a process to address such variation when it occurred, with less than 40 percent saying compensation was linked to cost and quality performance for some clinicians.

· Smaller healthcare delivery institutions lag with 90 percent of large hospitals and/or health systems having at least one at-risk contract compared to 76 percent of mid-sized institutions and 71 percent of smaller organizations, of which the authors say may have a limited ability to absorb the impact of outliers.

· More than 75 percent of respondents reported some experience with an alternative payment contract, but for most, less than 20 percent of revenue was involved and a substantial portion (31 percent) didn’t risk actual loss.

· Almost 25 percent of respondents said fear of financial loss is the No.1 reason they hesitate to move to a risk-based model, followed by difficulty in changing organizational culture (14 percent) IT, tracking, and management issues (14 percent), and ambiguity surrounding best time to transition from the current model (11 percent).

· A majority of respondents (61 percent) said their organization has a worse or worse than average ability to manage variation in cost, which does show some improvement from 8 percent over three years; and 35 percent felt their organization’s ability to manage variation in quality as average or worse than average.

“Given the lack of progress in underlying process development, it’s not surprising that there was no reported change in the percentage of revenue at risk over the 2017 survey,” said the authors. “The majority reported that 10 percent or less of revenue came through risk-based contracts. This measure not only remained flat relative to prior surveys, but also fell significantly short of the projections respondents previously made regarding how much revenue would be at risk in 2018. In addition, respondents’ future projections of revenue at risk were lower than projections reported in prior surveys. This suggests that respondents – and the industry – anticipate slower implementation of population health going forward than they have expected in prior years.”