- Population health management may not be as much of a focus for the healthcare community as previously thought, according to a report by Numerof & Associates. While more than half of providers surveyed in the report think of population health management as “critically important,” far fewer of them are fully engaging in the practice.
Most practices that do have some sort of population health management-related capitated payment partnership with their payers say that only 20 percent of their revenue flow goes through that that partnership. This indicates that providers and payers are only looking at population health management as an experimental business model.
The survey, fielded in collaboration with the Jefferson College of Population Health, included in-depth interviews with 104 hospital leaders in an attempt to examine different approaches, motivators, and payment patterns with regard to population health.
The researchers found that for those providers who have more revenue flowing through a population health payment model, their transition isn’t where it’s supposed to be.
“Among respondents reporting agreements with upside gain and/or downside risk, fewer than one in five said that they account for over 40 percent of revenue,” Numerof & Associates reported. “This leaves a large execution gap, as nearly half of these respondents expect such agreements to account for over 40 percent of revenue within two years.”
Perhaps that disconnect can be credited to a long-standing distrust between payers and providers. This distrust can turn into an unwillingness for payers to engage in population health with providers, as made evident by the mere 58 percent of payers reportedly willing to engage.
“The legacy of mutual distrust and antagonism between providers and payers is slowing the transition to new business models,” the report explained. “According to the COO of a major healthcare network, ‘Most payers we’ve engaged are not enthusiastic to partner with us on population health.’”
However, this slower adoption may not be without some difficulty on the provider side of things. Several of the providers that Numerof & Associates consulted for the whitepaper reported prevailing bad memories from healthcare reform strategies their organizations experimented with in the 1990s.
“We’re in the early stages of our population health efforts… However, we’re hesitant given previous experiences with capitation. In the 1990’s, we aggressively pursued capitated payments, resulting in about $200 million in losses,” one vice president of an academic medical center told the researchers.
The news isn’t bad for all population health adopters. Providers in New England, for example, are seeing a higher success rate in transitioning to this new model of healthcare, with 63 percent of New England providers reporting success with population health payment reform.
Providers who have mission-driven population health tactics are also seeing more success. While some hospitals may be implementing population health management reform in their organizations for financial reasons, others are doing it simply because it’s the right thing to do for their patients. The latter are seeing more success with their approaches.
“In large part, progress comes down to clinicians and employees recognizing ‘it’s the right thing to do,’” the researchers noted. “Those respondents describing their mission statement or culture as the primary driver for their population health efforts report a significantly larger proportion of revenues under alternative payment models, in contrast to organizations whose primary motivation is financial or market-based.”
Despite the conflicting advancements being made in population health amongst different providers, the researchers emphasized that this concept will continue to demand attention throughout the industry going forward.
As providers continue to narrow down their definition for population health and establish better connections with payers who will enable capitated payments, the industry as a whole will continue to see population health as a significant paradigm shift in care delivery.
“Population health has gained traction as an important solution in addressing the issues inherent in the current system,” the researchers concluded. “Not surprisingly, there are multiple definitions of population health with a general goal of achieving lower costs and better health outcomes. Regardless of the definition, effective implementation of population health management represents a paradigm shift.”