KPMG Survey: Majority Of Health Executives See Population Health Investment Recouped Within 4 Years

Preventive care enhanced in healthcare approach driven by new reimbursement models

Jan 15, 2015, 09:00 ET from KPMG LLP

NEW YORK, Jan. 15, 2015 /PRNewswire/ -- More than half of healthcare managers surveyed expected to recoup their investments in population health management programs – an approach to medicine that encourages greater collaboration and integration among healthcare providers and their patients – within three to four years, according to KPMG LLP, the U.S. audit, tax and advisory firm.

"Our clients see benefits from population health management programs as a part of the solution to reduce avoidable medical costs and variability in care," said West Johnson, a KPMG advisory partner who heads provider transformation. "Preventive care is given a big priority in these programs, since they deliver improvements in efficient and effective care with a high degree of patient engagement."

According to KPMG's online survey, 20 percent believe that investments in healthcare information technology and data & analytic tools will pay off in one to two years. Another 36 percent indicated that the payback period for these investments could take up to three or four years, showing a majority expect to recoup their costs within this time frame.  The survey showed that 29 percent see the investment in population health paying off in five or more years. Only 14 percent see them not recouping their costs at all. 

The growth in the number of accountable care type models, value-based contracts and other reimbursement mechanisms is driving much of this emphasis toward population health, said Joe Kuehn, a KPMG partner with the healthcare advisory practice.

Preventive Care Benefit

More than a third of the survey's respondents (36 percent) said the biggest clinical benefit derived from population health management will come from preventive care.  Developing evidenced-based clinical protocols to improve the efficiency of care was the second biggest response (23 percent) among the healthcare managers and executives surveyed, followed by managing chronic diseases (21 percent).

Only 24 percent of 296 respondents surveyed see their own population health management capabilities as "mature" and 38 percent describe their capabilities as in the "elementary stages." Nearly 15 percent of those surveyed see their population health capabilities as "nonexistent" or in their infancy (23 percent).

"Healthcare providers are facing a seismic shift in the coming years, largely because government and commercial payers will increasingly decline to pay for avoidable hospital visits," Kuehn said. "Providers and other participants in the care delivery system need the real time data and analytic tools to not only manage and improve the quality of care provided, but also the ability to measure costs to operate efficiently." The key to realizing the overall benefits of Population Health Management programs and related solutions and accelerating the return on the investment is through the redesign and implementation of care management processes, evidence based medical protocols and a strong change management strategy and roadmap, Kuehn added.

The survey took place during a Webcast in November titled "Enabling New Payment and Service Delivery Models through Technology" (please click link for replay) as part of KPMG's Care System Redesign webcast series.  Kuehn, KPMG Partner Michael Beaty and Medecision Sr. Vice President Carol Helton co-hosted the webcast.

Cost Challenges

Not surprisingly, costs are seen as the biggest challenge in implementing population health management programs among 42 percent of those surveyed. Getting staff and physicians comfortable with the approach behind population health program was the second largest challenge (25 percent), followed by interoperability with other providers (19 percent) and coming to terms with new payer relationships (14 percent). Regarding population health and its impact on meaningful use, respondents (42 percent) found that the investments in time, resources and money supported both efforts.  Only 13 percent describe meaningful use – a program designed to encourage greater adoption of electronic health records – an "impediment or distraction" regarding population health efforts.

KPMG LLP, the audit, tax and advisory firm (, is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 155,000 professionals, including more than 8,600 partners, in 155 countries.

Contact:    Bill Borden 
                 KPMG LLP