Recently, Numerof & Associates released its fifth-annual study of United States population health. The report provides an in-depth look at the progress being made by hospitals and other providers in their transition to “value based care.” Overall, the report found that while significant progress is still lagging among providers, COVID-19 has highlighted the need for providers to embrace risk and value. More than 500 key executives and decisionmakers across United States healthcare delivery organizations participated in the study via open-ended interviews.
The survey, which provides a very comprehensive look at the population health plans and progress of United States healthcare delivery organizations, was conducted between June 2019 and September 2019.
Study Findings
As alluded to above, based on the percentage of revenues from contracts involving bonuses or penalties linked to cost and quality, progress toward any meaningful implementation of population health remained static in 2019. However, the data did reveal limited improvement in processes that support the management of quality and in perceived organizational readiness for managing risk-based contracts. What has not changed however, is the perceived organizational capability to manage cost and institutional engagement with physicians to drive improvement in quality and cost effectiveness.
The study found that at a global level, respondents were more confident about their organization’s readiness to take on financial risk for cost and quality as compared to 2018: 66% of respondents said their organizations were “moderately” to “completely” prepared, which is a slight but significant improvement over 62% in 2018.
When respondents rated their organization’s ability to manage quality at the individual physician level, 65% said their organization was better than average, a significant improvement since 2016. However, when it came to managing cost at the individual physician level, only 35% said their organization was better than average, a result that has not significantly improved since the initial Numerof survey in 2015. Numerof hypothesized that the “lack of confidence in the ability of their organizations to manage cost at the individual physician level likely reflects a continuing lack of institutional engagement with physicians to drive improvement in quality and cost effectiveness.”
The surveyed executives did largely agree that population health is the future, with 83% of respondents saying that population health would be “very” or “critically” important going forward. Nearly all respondents (99%) project their organization will have some revenue in models with upside gain and/or downside risk in two years.
When it comes to the greatest barrier to the implementation of population health, the potential for financial loss was the single greatest barrier cited by the executives, with roughly 20% of respondents citing it. That concern was followed by other concerns that include issues with systems like IT, tracking, and management (15%), uncertainty about when to make the transition from the current model (13%), difficulty in modeling the cost of care across the continuum (10%), and difficulty changing the organization’s culture (9%).
Statements by the Study’s Authors
Rita Numerof, Ph.D., President of Numerof & Associates believes that “One of the greatest ironies in all this is that because of COVID-19, people are realizing that there’s just as much – if not more – risk in staying in an antiquated, fee-for-service model than there is in embracing an alternative. We expect to see the sentiments surrounding risk shift significantly next year, especially as awareness of providers’ success with capitated payments during the pandemic becomes even more mainstream.”
“It’s quite shocking to see that as hospitals and health systems continue to acquire independent physicians, they’re doing so without the processes in place to effectively manage physician cost and quality,” said Michael Abrams, managing partner of Numerof & Associates. “There’s been very little movement on creating care paths, flagging variation using order entry systems, equipping physicians with data, and tying physician payment to outcomes since our first survey in 2015, which points to a hugely overlooked opportunity to add value.”
Numerof conducted the study with David B. Nash, MD, MBA, Founding Dean Emeritus of the Jefferson College of Population Health. “The healthcare system that brought us to the edge of the abyss cannot be the system that propels us to the future; we have to transform the system,” said Dr. Nash. “Transforming the system will require new leadership structures, and because of the pandemic’s increased attention on social determinants of health, we anticipate the role of the Chief Population Health Officer to evolve to the Chief Health Officer.”