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Population health management is catching on in theory, but it’s still on the cutting edge in practice.

Managing the health of an entire population—including prevention and acute-care treatment—makes sense. And while a majority of healthcare delivery organizations rate population health as “critically important” to their success, it is in an experimentation phase as a business model, according to a study by the Jefferson College of Population Health and Numerof & Associates.

One reason population health has not advanced further is that economic incentives are weak.

A majority of the study’s survey respondents whose organizations have at least one payer contract that involves financial risk or the potential for higher payments based on performance reported that 20 percent or less of their revenues flow through these agreements.

While it may take a while for population health to progress beyond the experimentation phase, two of its components are likely to gain traction with many health systems in 2016: providing convenient access for patients and including home care in programs designed to reduce readmissions.

In Houston, for example, Memorial Herman Health System’s strategy includes opening outpatient facilities close to patients’ homes and extending hours of operation. Memorial Herman operates six comprehensive care centers, which offer 24-hour emergency services and physician offices, and plans to open at least three more. In northern New Jersey, Barnabas Health plans to open a similar facility with comprehensive outpatient services in late 2016.

Another example is Walgreens’ partnerships with two health systems aimed at improving patient access. Providence Health and Services in Seattle and Advocate Health System in Chicago will own and operate clinics under their brand names within Walgreens stores. Look for at least one more health system to form a similar partnership in 2016 with Walgreens.

Readmission prevention initiatives likely to grow include home visits from clinicians and pharmacists.  A recent study of 1,200 heart surgery patients found that those who received two home visits from physician assistants were 41 percent less likely than those in the control group to be readmitted to the hospital within 30 days. The study, presented at the annual meeting of the Society of Thoracic Surgeons, found that the house calls to 540 patients cost $23,500 but saved $977,500 in hospital readmission costs.  In St. Paul, Minnesota, a pilot program at Regions Hospital offered patients a home visit from a pharmacist within a week of hospital discharge. The program focused on patients with chronic illnesses who take multiple medications. Among patients who received a home visit from a pharmacist, 6 percent were readmitted within 30 days of a hospital stay compared with a readmission rate of 16 percent among patients who did not receive a home visit.

Initiatives designed to reduce readmissions have one motivation in common: economic incentives from the Centers for Medicare & Medicaid Services in the form of payment penalties. A recent study published in the New England Journal of Medicine found a significant decline in readmission rates for 3,387 U.S. hospitals from 2007 to 2015. Authors of the study concluded that this trend is consistent with hospitals’ responding to incentives to reduce readmissions.

This provides a clue about what will be a key factor in moving population health management beyond the cutting edge to widespread acceptance as a business model. As long as most revenue is tied to fee-for-service payments, the economic incentives are weak. But as more reimbursement becomes risk-based, adoption of population heath management as a business model will grow.

Deborah White is a senior analyst at Decision Resources Group with expertise in population health management and payment models.  Follow her on Twitter @DeborahWhiteDRG.

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