Population health program growth sputters, though execs agree they're needed

Les Masterson

March 12, 2019

Dive Brief:

• Healthcare organizations are adopting value-based care at a slower pace than expected, according to a new study by Numerof & Associates. Though nearly all respondents expect their systems will take part in risk-based programs within the next two years, most respondents have limited risk-based programs now. That's consistent with previous surveys. 
• The fourth annual study of more than 500 healthcare executives about population health adoption found an agreement that population health programs are needed. However, 61% of respondents said their organizations are average or worse when it comes to management in cost variation. That percentage has increased 8% over the three years.
• Health systems are reluctant to potentially sacrifice finances by assuming more risk. That's especially true for smaller systems. Only 71% of smaller organizations said they have at least one risk-based contract, compared to 90% of large companies.

Dive Insight:

Healthcare consultancy Numerof & Associates, which collaborated on the survey with the dean of the Jefferson College of Population Health, David Nash, found that health organizations view population health and risk-based contracts as the future, but think getting there is full of hurdles. Besides potentially losing money, health leaders cite other roadblocks to assuming more risk, including uncertainty and problems with changing the culture.

The majority of respondents in risk-based agreements reported 10% or less of their revenue came in through risk-based contracts — falling significantly short of their own previous projections for how much revenue would be at risk in 2018, Numerof & Associates found.

Rita Numerof, president of the firm, said healthcare is in transition, but "resistance to necessary change is deeply entrenched. Rather than embracing new models that they perceive as risky and difficult to manage, providers are trying to muddle their way through as long as possible."

Another issue with risk-based contracting is regulatory uncertainty, spurred in part by mixed signals from CMS. Though the agency has canceled some mandatory bundled programs created during the Obama administration and state a preference for voluntary programs, agency officials (including CMS administrator Seema Verma, HHS Secretary Alex Azar and Center for Medicare and Medicaid Innovation Director Adam Boehler) have recently warned providers to expect more mandatory risk-based and bundled payment models moving forward.

Numerof & Associates said these actions have healthcare officials questioning the future of value-based care. 

It's a question of minimizing the potential financial pain associated with risk-based contracting. That echoed recent comments on the topicafter CMS unveiled a plan to nudge providers to take on risk faster.

CMS released a "new direction" for the Medicare Shared Savings Program in late 2018. MSSP's Pathways to Success would demand providers take on risk earlier. CMS believes that more risk could lead to better savings. However, a recent Avalere study found instead that experience is the key to an ACO's success — not taking on risk.

Another issue is that payers are divided on the type of value-based system that works best, including patient-centered medical homes, accountable care organizations, bundled payments or episodes of care models.

While providers remain cool to the idea of more risk, payers view it a bit more positively. 

Steve Krupa, CEO of HealthEdge, recently said one way to jumpstart value-based care is for payers to "leverage a modern technology infrastructure that is designed to support the complexities in configuration and administration of these risk-sharing arrangements across all stakeholders."

https://www.healthcaredive.com/news/population-health-program-growth-stalls-though-execs-agree-its-the-future/550227/