Hospitals, Payers

In absence of mandates, adoption of population health lags

In a new study from consulting firm Numerof & Associates and the Jefferson College of Population Health, more than half of healthcare providers said that they get no more than 20 percent of revenue from risk-based contracts.

Population health

With all the lip service given to population health in the context of healthcare reform, you’d think everybody is active in this component of the Triple Aim. But, alas, this is healthcare, so things are moving slowly.

In a new study from consulting firm Numerof & Associates and the Jefferson College of Population Health, part of Thomas Jefferson University in Philadelphia, more than half of healthcare providers said that they get no more than 20 percent of revenue from risk-based contracts. “That leaves population health still in the realm of ‘business model experimentation,'” according to the survey report.

“It’s fair to say that there’s a lot more talk than action,” said Michael Abrams, managing partner of St. Louis-based Numerof & Associates.

Still, everybody seems to be thinking about population health, and expects adoption to accelerate rapidly in the near future. A whopping 97 percent of the 315 respondents called population health more than just “somewhat important” to the their future success, and 54 percent named it “critically important.”

Already, 79 percent of healthcare organizations said they were in at least one risk-based contract with a payer, though fee-for-service still predominates.

Reasons for the lagging progress vary widely. Barriers included issues with IT and management systems, intransigent organizational cultures and the threat of financial losses.  “This is newly charted territory for most healthcare providers and leaves them with many questions about how to initiate the journey and most importantly, how to ensure success in the transition,” the report explained.

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Numerof report on population health

There may also be some lingering animosity between providers and payers from the era of managed care in the 1980s and ’90s. “Mistrust is certainly a contributing factor,” Abrams said, but noted that it does not tell the whole story. “It hasn’t happened because it’s not mandatory,” Abrams explained.

“It will take a mandatory program from CMS” to get wider participation,” he added. Indeed, that is exactly what is happening in some areas of medicine.

As the report pointed out, the Centers for Medicare and Medicaid Services “took a stand” in 2008 by refusing to pay for “never events.” The Affordable Care Act in 2010 directed CMS to refuse to pay for certain preventable hospital readmissions, and gave the agency the authority to experiment with bundled payments, a move that encourages population health management.

Abrams specifically mentioned the Comprehensive Care for Joint Replacement model Starting April 1, CMS will require certain hospitals in certain markets to provide knee and hip replacements to Medicare beneficiaries at a bundled price.

He also encouraged providers to view the revenue issues associated with population health in a different light.

“It’s not like it has to be a losing game for providers,” Abrams said. Many get scared away when they look at potential declines in gross revenue from participating in population health programs. This, according to Abrams, is a mistake. “It’s the bottom line that matters,” he said.

Photo: YouTube user GE Healthcare, Numeroff & Associates