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Survey: Healthcare Providers Report Slow Progress on Population Health Goals

April 10, 2018
by Heather Landi
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While most healthcare executives agree that population health is the future, most organizations have failed to keep pace with anticipated progress, indicating a growing gap between intentions and progress for provider adoption of value-based practices, according to a new survey from Numerof & Associates.

Numerof & Associates, a St. Louis, Mo.-based healthcare strategy consultancy, surveyed more than 400 C-suite healthcare executives across U.S. healthcare delivery organizations to gauge the evolution of population health management. Numerof conducted the study in collaboration with David B. Nash, M.D., dean of the Jefferson College of Population Health.

The firm’s third annual national study of population health adoption examines the pace of transition from fee-for-service to models based on fixed payments linked to outcomes. The study found that a growing number of healthcare delivery organizations are failing to keep pace with their population health objectives and falling even further behind the leaders in this space.  

Most organizations are still just experimenting with risk-based contracts. Similar to the 2016 survey, more than three in four respondents reported some experience with an alternative payment contract—but for most (70 percent), less than 20 percent of revenue was involved. In addition, more than one third of respondents (38 percent) who claimed at least one risk-based contract in fact had no downside risk, only the possibility of a “bonus” if targets were exceeded.

In each prior administration of the survey, respondents predicted a dramatic increase in one measure of progress: the percentage of annual revenue that would be at risk in the next two years. However, this year’s results showed that in prior surveys, respondents had consistently overestimated what their current involvement in risk-based agreements. Those projections were not realized, as the majority of respondents to this year’s survey (54 percent) still reported less than 10 percent of their revenue comes through risk-based agreements.

In addition, the results indicate many organizations have fallen short of their readiness targets. In the 2015 survey, over half of respondents (59 percent) predicted they would be at least “very prepared” to take on risk in 2017. In the current survey, however, only one in five (21 percent) felt they had achieved that mark. Despite this slow adoption overall, some leading organizations did report a substantial portion of revenue moving to new models, increasing the gap over the lagging providers.

Most executives agree that population health is the future, with 95 percent of respondents rating it between “moderately” and “critically” important, with 42 percent rating it as “critically important. Nearly all respondents (99 percent) project their organization will have some revenue in models with upside gain and/or downside risk in two years, and on average, respondents project 15 percent growth in revenue flowing through at-risk agreements in the next two years.

Rita Numerof, Ph.D., the firm’s president, noted that the survey results indicate that while nearly all healthcare providers see population health as an important next step, a few leading organizations have separated themselves from the rest of the pack. “The shift in the business model has proven difficult for many to achieve due to institutional hurdles and concerns over financial losses,” Numerof said.

One-quarter of respondents cited the threat of financial losses as a barrier to moving to a risk-based model, according to the survey. Respondent identified other concerns, including uncertainty about timing (12 percent), and issues with systems like IT, tracking, and management (12 percent). While more than 75 percent of respondents reported involvement in risk-based agreements, their financial exposure has generally been limited, the survey found.

The survey results also indicate that smaller healthcare delivery institutions are lagging in their efforts to take on risk. In the survey, 91 percent of large hospitals and/or health systems said they had at least one at-risk contract, compared to 85 percent of mid-sized institutions and 71 percent of smaller institutions. “Smaller organizations may have a limited ability to absorb the impact of outliers, but they can make up for it with nimble program design and implementation. For those organizations that have undertaken risk-based agreements, smaller hospitals tend to have more revenue at risk than medium and large hospitals,” the survey report states.

While respondents reported some progress in their ability to manage variation in cost and quality, there is a long way to go, according to the survey results. A majority of respondents (58 percent) rated their organization’s ability to manage variation in cost as average or worse than average, an improvement of 11 percent over two years. More than one in three respondents (39 percent) view their organization’s ability to manage variation in quality as average or worse than average.

“Hospitals that hedge their bets by experimenting at the margins with at-risk payment models underestimate the importance of moving up the experience curve,” Michael Abrams, managing partner of Numerof & Associates, said in a statement. “Accountability for cost and quality is inevitable, and the sooner a commitment is made, the sooner the necessary competencies will be developed.”

According to the survey report authors, it’s not a question of whether population health is the future; it’s a matter of when and at what pace.

The survey also found that many organizations are working to address social determinants of health, and have established collaborations between healthcare providers, payers, and community resources to identify health needs, develop solutions, and maintain accountability for outcomes. For example, more than two in three respondents indicated they put patients in touch with community organizations (70 percent) and follow up with patients to discuss adherence to discharge recommendations (68 percent).

 

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