March 12, 2019

Fourth annual study by Numerof & Associates finds concerns over financial risk and cultural complacency still outweighing incentives to move forward

Progress toward implementation of population health as a model for organizing healthcare delivery appears to have stalled in 2018, according to the fourth annual State of Population Health survey by Numerof & Associates, a healthcare strategy consultancy.

The Numerof report provides the industry’s most comprehensive look at the population health plans and progress of U.S. healthcare delivery organizations. The 2018 report is based on an online survey of more than 500 C-suite healthcare leaders, with deeper insights gathered from open-ended interviews with selected executives.

As was found in prior administrations of the survey, 94 percent of respondents agree that population health is the future, and 99 percent predict that in the next two years, they will have revenue in upside gain/downside risk models. However, of the respondents in risked-based agreements, the majority reported that 10 percent or less of revenue came through risk-based contracts. This measure not only remained flat relative to prior surveys, but also fell significantly short of the projections that respondents made previously regarding how much revenue would be at risk in 2018.

“Healthcare is an industry in transition, but the resistance to necessary change is deeply entrenched,” said Rita Numerof, Ph.D., the firm’s president. “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.”

The survey finds that potential financial loss remains the top reason healthcare delivery organizations hesitate to transition to value-based arrangements that tie costs to outcomes. However, difficulty in changing the organization’s culture is now the second-biggest factor that respondents consider a hurdle.

Policy uncertainty at the federal level also may be contributing to administrators’ hesitancy. In particular, 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.

“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. “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. Ask retailers how effective a strategic crouch works against Amazon.”

Numerof conducted the study in collaboration with David B. Nash, MD, MBA, Dean of the Jefferson College of Population Health.

“The road to improving health is paved with value-based payment systems,” said Dr. Nash. “While our speed on this road seems to have slowed a bit, we will surely reach our destination soon. Kudos to the Numerof team.”

Numerof’s fourth annual State of Population Health survey report summarizes responses from more than 500 executives in urban, suburban and rural areas across the United States. These individuals represented 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. The full report is available at: