Providers remain committed to population health, but see payers as hurdle

Leaders at healthcare delivery organizations continue to place a high value on population health management, but they are also tempering their expectations for how quickly alternative payment models will grow, according to new research.

Of the organizations polled in Numerof & Associates’ annual national study of population health adoption, 43% called population health “critically important” to future success. In addition, 74% of respondents indicated their organization has a designated division, department or institute for population health programs, a greater share than in 2015.

Yet while 75% of respondents indicated they were in at least one risk-based agreement with a payer, only 1 in 10 said at least 40% of their organization’s revenue flowed through agreements with upside gain or downside risk.

Respondents this year were also less optimistic about how much alternative payment models will grow, projecting that 21-40% of their revenue will flow through such models within two years, while in the prior survey respondents projected 41-60%.

Rita Numerof
Rita Numerof

To Rita Numerof, the consulting firm’s president, the results show that while population health initiatives remain important, many organizations face considerable hurdles while implementing them.

“At the end of the day, healthcare delivery organizations, providers across the board are going to need to be concerned about connecting payments to outcomes, and I think the results of the survey really point to some of the challenges that a lot of them are having in shifting the business model,” she said in an interview.

One of those challenges, according to the report, is that providers believe payer enthusiasm for entering risk-sharing agreements has waned.

Indeed, not only are payers reluctant to partner with providers that appear to lack the organizational competencies needed for successful population health initiatives, but the two sides have a historically fraught relationship, Numerof said.

“Payers have over time made a point of being perceived as ‘how many different ways can I say no,’ to various kinds of interventions, and part of that, quite frankly, has been brought about by upcoding and upcharging where providers could,” she said. Providers, on the other hand, are “concerned payers are going to continue to say no.” 

Both can play a critical role, however, in moving the private sector more swiftly toward value-based care, according to Numerof. For providers, they can take on more risk and be responsible for managing variation in cost and quality across the continuum.

Payers, meanwhile, can share data with providers that gives them insight into how their members fare outside their walls, and they can consider different payment models that look at total costs of care, she said.  

And while any new political administration is sure to usher in a degree of uncertainty, Numerof said the private sector is likely to remain focused on embracing population health management and alternative payment models.

“I don’t believe for a moment that we are going to abandon a focus on value,” she said, adding, “I think that the new administration can create some very good opportunities for more transparency, accountability and real choice.”