Population health programs aim to improve the overall health of communities by focusing on health outcomes across different populations. However, these initiatives face significant challenges within health systems, primarily due to inadequacies in the current payment structures. This report explores the latest findings on why population health programs struggle to gain traction and sustainability, helping to inform healthcare stakeholders about potential solutions.
Understanding Population Health Programs
Population health programs are designed to address chronic diseases and other health issues that affect large groups, with the goal of enhancing health outcomes and managing healthcare costs. As chronic conditions account for approximately 90% of U.S. healthcare spend, these programs are crucial. They often utilize strategies like remote patient monitoring (RPM) and chronic care management (CCM) to manage patient health proactively.
Financial Sustainability Issues
A study published in the July edition of NEJM Catalyst sheds light on the financial viability of population health programs. The research focused on Penn Medicine’s Healthy Heart program, which aimed to reduce heart disease risk among primary care patients. The findings highlighted that while these initiatives yield clinical success, existing payment models fail to provide adequate financial support for their sustainability.
Key Findings from the Study
Inadequate Payment Structures: The current payment mechanisms, whether fee-for-service (FFS) or value-based payment (VBP), do not sufficiently cover the costs associated with population health programs. Only certain scenarios involving universal coverage of CCM and RPM billing codes proved financially viable.
Challenges in Value-Based Payment Models: The typical VBP models often deliver modest returns due to reliance on short performance cycles that fail to account for long-term benefits. This complicates the financial landscape for health systems trying to implement population health strategies.
- Billing Codes Matter: The research found that universal coverage of specific FFS billing codes crucial for population health management is essential. Inconsistencies in how commercial payers cover these billed services significantly impede program profitability.
Barriers to Implementation
The study outlined three primary challenges:
Inconsistent Coverage: Varied coverage of FFS billing codes by payers creates uncertainty for health systems, making it difficult to predict revenue from population health programs.
Insufficient VBP Returns: The short-term nature of performance assessments under VBP hinders a more substantial investment in programs that could yield long-term health improvements.
- Fragmented Payer Environment: A mixed landscape of payers with different incentives complicates the scalability of population health initiatives, as health systems must navigate varying rules and regulations.
Recommendations for Improvement
The authors provided several recommendations aimed at health policymakers and payers to enhance the financial sustainability of population health programs:
Expand Coverage for Billing Codes: Payers should ensure FFS codes, critical for population health management, are universally covered or incorporated within capitated payment models.
Revise Value-Based Payment Metrics: VBP frameworks should incorporate multi-year performance assessments that account for long-term health improvements, allowing better alignment of incentives with health outcomes.
- Encourage Cross-Payer Collaboration: By promoting partnerships among payers, health systems can create a more cohesive approach to reimbursement models, enabling wider adoption of effective population health strategies.
The Road Ahead
Matthew Press, one of the researchers, emphasized the need for evolution within the payment environment to support these vital initiatives. The study serves as a wake-up call, illustrating the discrepancies that exist in contemporary payment systems and the hurdles healthcare organizations face in establishing financially viable population health programs.
CMS’s recent updates regarding new cardiovascular billing codes and advanced primary care bundled codes represent a positive shift but require widespread acceptance among various payers to foster genuine transformation in population health funding.
Conclusion
The necessity for population health programs in the current healthcare landscape is undeniable, yet their successful implementation remains challenged by payment structures that don’t adequately support their financial viability. By addressing the financial sustainability issues, enhancing payer collaboration, and revising metrics around value-based payments, the potential for these programs can be unlocked, leading to improved health outcomes across communities. As stakeholders in the healthcare system work together toward these solutions, the promise of population health management may finally be realized, promoting a healthier future for all.
