Trends to Watch: Population Health Initiatives May Be Declining

Key Takeaways:

  • A recent survey of healthcare leaders suggests significant disparities exist between how hospitals view the importance of population health and how they are approaching it.
  • Out of 500 healthcare leaders, 99% of respondents believed that population health initiatives will yield financial benefits in the future.
  • Only 10% of those engaged in risk-based agreements suggested that these activities are promoting their financial bottom line.
  • Hospitals are becoming increasingly vulnerable to competition from public entities like Walgreens and CVS.

A recent survey of 500 healthcare C-suite executives revealed that there has been a recent stall in population health initiatives. Out of the 500 leaders surveyed, 99% of those agreed that population health initiatives will contribute to positive financial performance in the future. However, when the healthcare leaders who were already engaged in risk-based agreements were asked what the financial implications were for them, the respondents stated that only 10% or less of their revenue came through such activities1.

As the success of the healthcare industry becomes increasingly linked to both population health and patient preferences themselves, it is crucial that hospitals continue to watch population health as a critical factor in the financial success that stems from patient satisfaction and quality. Simply put “whatever business model empowers the consumer, wherever she is including at home, will spell success. That’s where population health must go,” according Dr. David Nash, MD, MBA, at Thomas Jefferson University, Dean of Population Health. Seeing as companies like CVS, Amazon, and Google have begun to enter the population health arena with a focus on convenience and ease of care, hospitals may begin facing some non-traditional competition.

Contrary to these threats, healthcare’s transition into new models of care seems to be slowing significantly. Some of the main industry trends responsible for this range from financial loss, the cancellation of mandatory bundling pricing programs as well as culture. These trends are further explored below1.

Additional takeaways:

  • Financial factors are the biggest deterrent to assuming risk. Of those surveyed, “nearly 25% of respondents cited financial loss as the biggest challenge for adapting to models based on risk. Other roadblocks include challenges related to changing the culture. In addition, policy uncertainty at the federal level also may contribute to hesitancy. ‘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,’” according to Health Leaders.
     
  • Larger organizations seem to be leading the movement. The survey revealed that while 90% of large hospitals reported having at least one contract based on risk, only 71% of small hospitals had been inclined to do so1.
     
  • Despite previous progress, cost and quality management is has slowed significantly. According to Health Leaders,when asked about management in cost variation, 61% of respondents rated their organization as average or worse than average. This reflects an improvement of only 8% over three years”.

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In case you missed it:

Sources:

1Roth, M. (March 26, 2019) Survey Says Population Health Initiatives Are Stalling

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