The Hospital Finance Podcast®

State of Population Health Survey [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by Michael Abrams, the co-founder of Numerof to discuss their sixth Consecutive State of the Population Health Survey, which looks at the evolution of population health in the United States.

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Highlights of this episode include:

  • Who is Numerof & Associates?
  • What was researched for report
  • The methodology for producing the research
  • How population health for organizing health care delivery improved
  • Future of population health

Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance podcast. As U.S. government policy grows more focused on moving to a value-based model, population health management will be increasingly seen as a key part of the solution for realigning the health care industry to deliver better care at lower costs. Recently, Numerof & Associates completed their sixth consecutive State of the Population Health Survey, which looks at the evolution of population health in the United States. To share the findings of that survey, I’m joined by Michael Abrams, who is co-founder and managing partner of Numerof. Over the last 25 years, Michael has built a portfolio of strategy and business performance successes as an internal and external consultant to Fortune 500 corporations. Michael, welcome back to the show.

Michael Abrams: Thank you, Michael. Glad to be with you.

Mike: So before we get going and diving into the report, why don’t you tell us a little bit about Numerof & Associates?

Michael: Be happy to. So for those of you not familiar with Numerof, we’re a strategy and implementation consulting firm. We have been in business for over 25 years and our focus has always been industries in transition, which includes health care delivery, certainly, as well as payers, pharmaceutical, and medical device manufacturers. And our focus has been to help clients adapt to the dramatic changes that we see occurring in the industry with strategies and service offerings that deliver value and differentiate them from the competition. Our clients include major community and academic provider organizations, Fortune 500 insurers, and manufacturers of pharmaceuticals and medical devices.

Mike: Thank you, Michael. So, as I mentioned in the intro, this is the sixth time your firm has published this report. Let’s just talk about the background a little bit, and then we’ll head into the findings. So talk to us specifically about what you were looking at with this research.

Michael: Okay, so if we go back to 2015, when we started this project, we felt and we had partnered with Dr. David Nash, who was then dean of the Jefferson College of Population Health, to study the evolution of population health management in the United States. And we looked out at the landscape and saw that there really wasn’t a very good way to gauge the progress of the adoption of population health principles in health care delivery organizations across the country. So we developed an online survey that was intended to assess progress, challenges, and success factors in health care delivery organizations transition to population health management with particular interest in year over year trends.

Mike: Can you briefly explain your methodology for producing the research?

Michael: Sure. So our target audience for the survey has always been health care systems, hospitals, academic medical centers, individuals in those organizations at the VP level or physician group executives that are part of an IDN. In this year’s administration, we received nearly 300 responses from our online survey. Respondents included, as I said, C-suite executives across the entire country representing urban, suburban, and rural areas, standalone facilities, small systems, IDNs, for profit, not for profit, academic and community facilities all represented.

Mike: Excellent. So let’s dive into the findings here. First finding is that you found the progress toward implementation of population health as a model for organizing health care delivery appears to have improved incrementally in 2020. Why don’t you tell us about that?

Michael: Well, I will tell you that each year we have been looking for the change that has been predicted. In fact, every year in our survey, we ask respondents to tell us what percentage of their revenues they think will be coming from contracts where they have upside or up and downside risk. And each year, the last certainly five years, the actual performance, the actual percentage of business that comes through contracts that have some connection to managing cost and quality has been less than what had been predicted two years earlier. In this year, we did see some incremental, as we said, progress in that regard. We have always considered the key measure of implementation of population health should be the percentage of revenues that a health care organization receives through contracts with either up only or up and downside risk. And for the last four years, that median range has been 11 to 15 percent. In 2020, it moved up to 16 to 20 percent. Which is to say, 51% of our respondents said their organization gets 20% or less of their revenue through population health oriented programs. Not a big change, but a change nonetheless. And one, I guess, that we were glad to see because the last several years have been flat.

Mike: That’s right, and so do you think that that means providers still think population health is the future? Is that what you think that portends?

Michael: That’s an interesting question. I guess the answer is a qualified yes, they do, but the percentage of respondents who said in the survey that they believe that population health will be critically or very important to their future success is at 80% now, and that number has been trending down over the past five years. Not statistically significantly so. But when I look at those numbers, they’re moving downward, not upward. Likewise, when we asked respondents what the primary driver was to take on population health, a shrinking percentage say that they believe that the fee for service system won’t last forever. And what that says to me is that after 10 years of experimenting at the margins, many in health care are beginning to doubt that population health is going to meaningfully supplant fee for service.

Mike: Well, that’s an interesting analysis and maybe not surprising, given where we’re at. It’s a hard transition. And certainly there are some providers that want to expand their population health offerings and are increasingly acknowledging the importance of social determinants of health. I know you looked at that in the report as well. Could you give us some detail in that area?

Michael: Yeah, I’d be happy to, Mike. So one of the most significant trends over the last few years has been growth in the percentage of organizations that are responding to community health needs in the areas of housing, transportation, and food insecurity. About half of our respondents said that their organizations offer assistance with transportation, food, and nutrition, and 30% provide housing or community development support, most often in partnership with other community organizations. So, yes, that has been an important change, and certainly the pandemic really highlighted the fact that disadvantaged populations and individuals that are struggling either with comorbid conditions or conditions in their living area that contribute to their vulnerability make the entire population vulnerable. And that has, I think, dramatically impacted activity in this area.

Mike: So you just mentioned the pandemic, and it’s pretty hard to talk about health care without looking at it through the lens of the pandemic, at least in 2020. So let’s talk about the effect on provider appetites for risk based arrangements. Do you think that the pandemic affected that at all?

Michael: Well, I will tell you that we expected to find that, given– how should I say this? Given the few organizations that have a serious commitment to population health and receive a significant amount of their revenue in the form of per member per month payments, those organizations continued through the pandemic, and many of them did not feel the same pain that fee for service based organizations felt when they had to discontinue elective surgeries, which has historically been the base, the financial base, for keeping their balance sheets intact. And so we thought that with that example of both what an alternative payment model could do and with the pain that fee for service based organizations felt, that there might be some who, as a result of the pandemic, felt differently about alternative payment models and that they would be open to or more open as a result to the idea of taking on a population health model. What we did find is that as a result of COVID, organizations appear to be more receptive to selectively adopting elements of population health. And the standout here is telehealth. Prior to the pandemic, utilization had been marginal in most provider organizations. COVID dramatically changed that. When they were asked if they would make more use of telehealth post COVID than before, 94% said yes, they would. When they were asked how likely would they be to implement more joint efforts with payers to apply population health practices, 70% said that was likely. When asked how likely would they be to pursue more direct to employer contracts as a result of the pandemic that include population health components, about 70% said yes, that that was likely, too. And finally, home health is another service that demonstrated tremendous value as providers were forced to stand up new models of care. 64% of respondents said their organizations are likely to expand their use of home health services post-COVID, so it has made a difference. It made a difference in openness to some of these other areas. But on the question of, are you likely to more seriously consider population health than you have before in a global sort of way, we did not find a dramatic change there.

Mike: Do you think the change might have been bigger if something like the Provider Relief Fund wasn’t in place and the pain was a little bit more acute?

Michael: I think there’s no question that the bailout that followed the pandemic and recognizing that there really wasn’t a great option to do something different, but those bailouts did reinforce the idea that fee for service may, yes, may have unforeseen downside risk because when the customers stop coming, so does the revenue stops flowing. But if government is always there to make up the difference, then why change?

Mike:  Yeah, yeah. Interesting take on that, Michael. Another year of a great report. So much more in it. If someone would like to read the full report, where can they go?

Michael: So go to our website, it’s www.nai-consulting.com, and you’ll find it on our home page under health care industry insights.

Mike: Michael Abrams, thanks so much for coming back today on The Hospital Finance Podcast.

Michael: My pleasure, Mike.

The Hospital Finance Podcast

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