Uptake remains minimal for population health management

Population health management was once heralded as the ideal solution for employers seeking to provide employee health coverage that achieved two goals: a healthier employee group at a lower – or at least a predictable – cost. But, as a recent survey underscores, the concept remains largely conceptual.

The latest look at population health comes from consulting firm Numerof & Associates, which queried 300 C-Suite leaders to find out the state of this particular art.

The result: not much uptake to date. Why? A variety of factors, of course. But chief among them appears to be resistance from the provider side – certainly not a surprise, since population health requires providers to share the risks with the plan sponsor. And providers remain notoriously risk averse.

“Entering the population health waters has unfortunately been more of a toe dip than a real commitment for many health systems,” says Rita Numerof, Ph.D., president of Numerof & Associates as she reflected upon the results.

It’s not that employers have discarded the plan design. In fact, more than 80% of executives who responded to the survey described population health as “critically” or “very important” to their organization’s future. They just haven’t been able to make much headway in implementing population health. Only 25% say they were at least somewhat prepared to transition to a plan design that links payment to patient outcomes and utilization.

“For at least five years now, respondents to Numerof’s annual survey have predicted that a population health approach will be a critical component of health care delivery moving forward,” the company says in a release. “Yet this seventh annual ‘State of Population Health’ survey report continues to show that we are not there yet.”

Example: In the 2019 survey, respondents predicted that “a median of 30% of total revenue for their organizations would be through risk-based contracts.” But the 2021 report found that the true figure was closer to 10%. Median amount of reported revenue flowing through risk-based contracts was only 10%. As for true capitated contracts with providers, more than half of those surveyed say their organizations had none.

“While 85% of respondents said their organization was in at least one agreement with a payer that included upside gain and/or downside risk, just 32% of respondents reported that their organizations received more than 20% of its revenue from risk-based contracts,” the report states.

The survey did produce positive results. When asked about the pandemic’s effect on propelling at-risk contracting forward, 6 in 10 say they expected that to happen, compared to just 4 in 10 in the previous survey. Nearly 4 in 10 say capitated models would gain favor following the pandemic; just 2% say it would in the previous survey. Further, 8 in 10 foresaw some form of joint efforts occurring with payers to apply population health practices. In the prior survey, only 1 in 10 forecast such collaborations.

Another promising survey result: 41% say payers are reportedly “very” or “completely” willing to enter into agreements with payments tied to outcomes – up 10% from 2020.

Why do company executives want to implement population health plans for their employees? It’s not really about being able to predict health care costs; only 1% cite that as their main reason for wanting to move in that direction. Instead, controlling clinical costs and clinical quality emerged as the No. 1 motivator, as cited by 31% of respondents.

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“Clearly, the road toward population health management has been a bumpy one, with adoption and progress slower than executives’ expectations,” says Michael Abrams, managing partner of Numerof & Associates. “However, the report does show significant progress being made by providers in a number of key areas, including doing more to address social determinants of health (SDOH) and expanding their presence across the health care continuum. But until there is more transparency and accountability for cost and clinical outcomes, we expect further challenges to widespread adoption of population health.”