Study: Healthcare organizations remain committed to population health

February 23, 2017
Nicole Lewis
Nicole Lewis

Small practice physicians need to build a strategy to prepare for success in this growing model of care, expert says.

A majority of healthcare executives believe population health will contribute to their future success, adding that it presents an important opportunity to control clinical costs, enhance the quality of care and improve patient outcomes, according to a new study.

The State of Population Health survey, published by Numerof and Associates, a healthcare research and consulting firm, relied on responses from 537 executives at healthcare systems, hospitals, academic medical centers and physician groups. Participants assessed their progress and the challenges they face as they implement population health initiatives.

The survey found that 95% of respondents rated population health as moderately or critically important, with 43% saying it is critically important to their future success.  A majority of respondents (74%) said their organization has a designated division, department or institute for population health programs, and 64% said their organization has a formal process for working with physicians who are outliers on cost and quality. Another 53% said physician payment is at least partially based on the ability to manage variation in cost and quality.

There are multiple reasons to pursue population health, but the greatest driver for its adoption, according to 99% of respondents, is the opportunity to control clinical costs, quality and outcomes. The second driver identified by respondents is programs undertaken that include performance-based financial incentives (96%). In third place (95%) is the recognition that the current fee-for-service model won’t last forever.

Next: The small practice impact

 

The small practice impact

As the healthcare industry shifts toward value-based care that requires more accountability and collaboration among care teams, small physician practices will be required to create greater efficiency in their care delivery systems and build stronger partnerships with other healthcare stakeholders, said Michael Abrams, managing partner at Numerof and Associates, based in St. Louis, Missouri. 

Abrams told Medical Economics that small independent practices should consider that 74% of respondents have implemented formal processes to identify variation in cost or quality at the physician level for one or more procedures.  Additionally, 53% said they pay at least some physicians based on their ability to manage variation in cost or quality.

Abrams said small physician practices that want to be included in narrow networks for managed care contracts will need to prove that they can manage quality and costs to strengthen their argument that they are capable of taking on risk.

“Large institutions who contract with payers to manage a patient group for a target price will be under pressure to find providers who can deliver quality care at prices that are competitive,” Abrams said.

As the number of population health programs increase, healthcare organizations will look for physicians that can prove, for example, that they have case costs and readmissions rates that will help the institution’s averages.

“If a physician or surgeon can show that their patients have a lower rate of infection or are discharged sooner from the hospital, those physicians can make the case that they have a higher quality of care and they’ll have the advantage of being included in population health initiatives over other doctors. That's how the case for quality interacts with the case for cost,” Abrams said.

Other key findings that small physicians should take note of are:

• Organizations expect alternative payment models to grow, but have lowered their expectations for the pace of change:  Respondents projected 21-40% of their revenue will flow through alternative models within two years, down from 41-60% in the 2015 survey.

• Confidence in taking on risk is low: Only 17% said their organization is “very prepared” to take on risk today.

• Nearly half (43%) of respondents still view their organization’s ability to manage variation in quality at the physician level as “average” or worse.