While leaders recognize the value of a new healthcare model, they are still early in forming strategies and making investments.
This article appears in the October 2015 issue of HealthLeaders magazine.
Population health management is now clearly in the crosshairs for the healthcare industry; organizations are actively exploring strategic initiatives, executing mergers and acquisitions, investigating risk-based financial models, and investing in IT infrastructure. With the majority of respondents (69%) in our survey reporting that they are either fully committed or have a pilot program underway for managing the overall health of a defined population, it looks like population health's time has come. Or has it?
While on the surface it appears that providers are fully engaged in population health, one of the key indicators is the degree to which they have exposure to upside and downside risk. Taking on risk and exploring new financial risk structures is an essential aspect of developing population health competency and effectiveness. Therefore, an open question relates to the all-important bottom line: What does net patient revenue from risk-based population health look like? Our survey research indicates that 42% of respondents who are fully committed or have pilot programs underway to manage the overall health of a population have risk-based revenue of less than 10% (some have no risk-based revenue at all), which suggests that population health management has yet to reach critical mass.
Managing a defined population
A quick glance at the data indicates that large numbers of healthcare organizations are actively participating in population health management. The majority of respondents (69%) say that they are either fully committed or have pilot programs underway for managing the health of a defined population, although interestingly the percentage is down somewhat from last year's survey (80%). Looking more closely at the results, both fully committed (41% versus 49%) and experimental or pilot programs (28% versus 31%) are lower this year.
"This is generally the kind of the trend that I hear when talking to industry leaders. Everybody's trying something, but the excitement or the initial fervor seems to be dwindling a little bit. The thought process is 'Before we jump into this thing with two feet, we've got to better understand what we're dealing with,' " says Michael Kotzen, executive vice president for population health management at Virtua, a nonprofit healthcare system that serves the southern New Jersey and Philadelphia area.
"I also think [respondents are] thinking full capitation, and I don't think many organizations are getting into that now. I think they are looking at specific opportunities around engagement, analytics, and care management that ultimately will prepare them for when that day comes," Kotzen says.
While leaders may be taking their time as they sort out population health's potential impact on their organization, an increasing share are at least thinking about starting programs. Twenty-five percent of respondents report that they will either pursue it but have not begun yet or are examining how or whether to pursue it, up from 18% in last year's survey.