Healthcare culture is slowing the move toward population health

Progress toward the implementation of population health as a model for organizing healthcare delivery appears to have stalled in 2018. Unfortunately, that’s the key finding from Numerof’s fourth annual State of Population Health survey, which revealed that organizations are well behind where, two years ago, they thought they’d be – especially when it comes to alternative revenue models and risk-based contracts.

Financial concerns continue to be the biggest barrier to change. Nearly a quarter of respondents cited the threat of financial loss as the primary barrier to moving to a risk-based model. As one top executive noted: “We are considering investments in new models of care that have more risk, but these models can become a direct hit to our revenue … when risks are not mitigated properly.”

However, for the first time in our administration of the survey, difficulty in changing organizational culture ranked as the second-biggest hurdle. Healthcare organizations are finding that changing people is even more difficult than changing processes.

One health system executive described the difficulties she encountered trying to get leadership buy-in to population health and value-based care. She said she’d “spent most of 2018 lecturing on population health, ACOs and the penalties for not meeting goals – a lot of people have no idea. I am amazed by the resistance to accountability.”

Policy uncertainty at the national level has also contributed to healthcare leaders’ reluctance to move forward by raising doubt about CMS’ timeframe for change. In particular, the cancellation of several mandatory bundled pricing programs in favor of voluntary versions raised questions about when – and even if - value-based care would become more than an experiment.

However, this new paradigm may be more imminent than many delivery organizations think. While the Administration’s drive toward a market-based model of healthcare is subject to political pressure, new competitors like Amazon, JPMorgan, Berkshire Hathaway, Apple, Google, and others are not so constrained. The promise of a $3 trillion industry with a deeply dissatisfied customer base is attracting a wave of innovation from nontraditional players with the potential to redefine the rules rapidly. Conventional providers would be well advised to accelerate their progress up the learning curve lest they find themselves scrambling to play catch-up.

At its core, population health is about managing the health of a defined population by providing the right intervention for a specific patient at the least costly point in the care continuum. Its goals include improving care coordination, enhancing health and wellness, eliminating disparities, and increasing transparency and accountability. When population health management works well, acute care utilization is reduced, total healthcare costs are lower, and “healthcare” finally becomes more than just “sick care.”

Accomplishing this requires reimagining what hospitals are actually for as well as the assumption of financial risk. This is largely uncharted territory for most healthcare providers, and the great unknown can be frightening as it challenges the status quo. As a result, few people will change unless they are forced to do so.

Executives with the old “heads in beds” mindset are especially slow to recognize that hospitals were never meant to be destinations of choice. Real cultural change starts by fresh thinking about delivery models that will keep consumers healthy and costs low. The biggest task for healthcare executives going forward will be convincing their organizations that these changes are needed – before it’s too late.

Healthcare’s historical incentives have been seriously misaligned, and support for population health management has grown in response. The good news is that there are actionable steps that providers can take to create a culture in which these initiatives can thrive. The only thing stopping industry leaders from moving forward is themselves.

Michael Abrams, MA, is the co-founder and managing partner of Numerof & Associates, a firm that helps businesses across the health care sector define and implement strategies for winning in dynamic markets.

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