January 31, 2017

Second annual study by Numerof & Associates provides national snapshot of transition from fee-for-service to fixed payments linked to outcomes

Healthcare delivery organizations remain committed to population health management but have lowered expectations for the pace of change. This finding from the second annual State of Population Health survey by Numerof & Associates, a healthcare strategy consultancy, underscores the importance of getting the next wave of health reform right.

The survey collected responses from more than 500 health care delivery executives. Of this group, 95 percent rated population health as important for future success and many have taken steps to move forward. Nearly three-fourths (74 percent) of respondents reported their organization had a designated division, department or institute for population health programs, a 13 percent increase over the previous year. Almost two-thirds of respondents (64 percent) reported a formal process for working with physicians who are outliers on cost or quality and more than half (53 percent) said physician payment is at least partially based on the ability to manage variation.

However, organizations still have little financial exposure tied to risk-based contracts. The majority of respondents said 10 percent or less of their current revenue was in such agreements. Executives are also dialing back their expectations for growth from this baseline. In this year’s survey, respondents project 20 to 40 percent of their revenue will flow through alternative models within two years, down from 40 to 60 percent in the prior survey.

“Numerof’s second annual survey finds healthcare providers see population health as critical to future success and an opportunity to improve clinical costs, quality and outcomes,” said Dr. Rita Numerof, the firm’s president. “However, this essential business model change is difficult – even harder than many executives thought a year ago – and there’s additional risk if the new administration moves away from value-based care initiatives.”

As a measure of this difficult transition period, survey respondents commonly described the challenge of succeeding in two payment models. Only 17 percent of respondents said their organization is “very prepared” to take on risk today.

“Population health management will occupy a significant place in the future of healthcare, but the journey, for many, is formidable,” said Michael Abrams, Numerof managing partner. “Unlike the current model, providers must focus on the entire care continuum – from preventative care programs to post-acute facilities. Collaboration is key to success.”

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

“This state of the field survey report clearly shows that population health has matured and despite the election surprise remains the single best strategy for our ailing system,” said Dr. Nash. “The nation’s first College of Population Health is proud to work with Rita Numerof and her accomplished team to bring this important survey to our colleagues. We need reliable data like this now more than ever as our broken system faces a more uncertain future.”

Numerof’s second annual State of Population Health survey collected input from leaders representing 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: http://nai-consulting.com/numerof-state-of-population-health-survey/