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Analysis

Survey Says Population Health Initiatives Are Stalling

By Mandy Roth  
   March 19, 2019

Numerof's annual report indicates some disturbing trends are emerging in industry's progress to new models of care. Financial loss, culture, and cancelation of mandatory bundled pricing programs may be to blame.

While healthcare executives agree that population health is essential, most organizations are dragging their feet when it comes to embracing these new models of care, according to The State of Population Health Fourth Annual Numerof Survey Report.

The report, produced by global healthcare consultancy Numerof & Associates in partnership with David B. Nash, MD, MBA, founding dean of the Jefferson College of Population Health at Jefferson in Philadelphia, is based on surveys and interviews conducted with more than 500 C-Suite healthcare executives between August and October 2018.

Progress Has Stalled
 

While 94% of respondents agree that population health is the future, and 99% predict that they will have revenue in upside gain/downside risk models in the next two years, the majority of respondents in risk-based agreements report that 10% or less of revenue came through such contracts. Compared to earlier surveys conducted by Numerof, this measure remains flat and fell significantly short of the projections by previous respondents regarding how much revenue would be at risk in 2018.

A Numerof executive posits that the absence of external pressure may be partially responsible for the stall in population health initiatives, but warns that that outside forces may change the game.

“Healthcare delivery organizations may breathe a sigh of relief as policymakers ease the pressure for change, but their comfort should be short-lived, as a slew of nontraditional competitors like Amazon, JPMorgan, Berkshire Hathaway, Apple, Google and others are on the prowl,” said Michael Abrams, managing partner of Numerof & Associates in the news release. “A $3 trillion industry with a deeply dissatisfied customer base is attracting a wave of innovation from entities that aren’t beholden to the old ways of doing business."

Other Key Findings
 

The report also provides other details:

  • Financial loss is the largest barrier to assuming risk. Nearly 25% of respondents cited financial loss as the biggest challenge for adapting to models based on risk. Other roadblocks include challenges related to changing the culture. In addition, policy uncertainty at the federal level also may contribute to hesitancy. "The cancellation of several mandatory bundled pricing programs in favor of voluntary versions has raised questions about the future of value-based care, just as many administrators were beginning to accept it as inevitable," according to a news release.
     
  • Smaller organizations are behind. The survey indicates 90% of large hospitals had at least one contract based on risk, compared to the 71% of smaller organizations.
     
  • Despite some progress, cost and quality management is lacking. When asked about management in cost variation, 61% of respondents rated their organization as average or worse than average. This reflects an improvement of only 8% over three years.

“Healthcare is an industry in transition, but the resistance to necessary change is deeply entrenched,” said Numerof President Rita Numerof, PhD in the release. “Rather than embracing new models that they perceive as risky and difficult to manage, providers are trying to muddle their way through as long as possible.”

Methodology
 

Numerof’s fourth annual State of Population Health survey report summarizes online responses gathered between August to October 2018 from more than 500 executives in urban, suburban, and rural locations across the United States. Open-ended interviews with select executives provided deeper insights. Participants include physician group executives and vice presidents, as well as individuals working in U.S. provider organizations including healthcare systems, hospitals, and academic medical centers. Respondents represent a wide range of delivery organizations, including standalone facilities, small systems, and IDNs; for-profit, not-for-profit and government institutions; and academic and community facilities.

Mandy Roth is the innovations editor at HealthLeaders.


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