Population health management solutions have never existed in a vaccuum: they are typically a suite of products enabled by an enterprise-wide strategy with specific goals. Vendors are learning that offering services to fill administrative needs is a good tactic to win deals.
The growing trend for Population Health Management (PHM) HIT vendors to offer one or more service offerings is worth examining further. HIT vendors are having to delicately weigh the value of stepping outside their software core competency to also now develop consulting infrastructure, or else risk losing bids to competitors that do offer stand-alone or bundled complimentary PHM services.
Services typically begin when an industry is seeking implementation speed during times of financial constriction. We are there. Healthcare is certainly not new to outsourcing. Hospitals have for decades outsourced food services and housekeeping, and later, IT functions and clinical staff. Providers have readily outsourced Billing and Collection RCM functions, but have been slower to outsource clinical functions such as Care Management.
PHM outsourcing is currently in an immature state and fragmented across multiple service entities to varying degrees.
Besides studies and surveys that shed light on value-based care (VBC) participation rates, hiring patterns are another means to detect movement in a market. Right now, here is what we are seeing:
- Providers are hiring PHM expertise. This is true across both large health systems and AMCs as well as smaller regional health centers. Using LinkedIn, Indeed, and Monster as reasonable representative sources of job postings, I searched on “Population Health”. There are literally hundreds and hundreds of postings for PHM Medical Directors and other PHM leadership roles. Providers are insourcing PHM leadership expertise both to support proactive business changes and oftentimes to meet state Medicaid requirements. Will this hiring frenzy slow as the challenges of scaling this approach become more apparent?
- Consultants are reducing staff. As the providers bring PHM expertise in-house, they have less need for costly support from traditional consulting firms. ECG Management Consultants, Huron Group, Deloitte, Accenture, PwC, and The Advisory Board have all reported throughout Q1 2017 noticeably softer demand from providers.
The sweet spot emerging in the market is optimized for the PHM HIT firms and ACO Enablers that offer a blend of software and services. They can best cater to providers with fledgling PHM infrastructure who need the right blend of consultative services, support services, and PHM IT including care management, analytics, and patient engagement solutions. Predominant support services in market include outsourced care management (eg. Optum, Evolent, Cerner), and Strategy and Governance as well as Analytics as a Service (eg. Optum, Cerner, Epic). We also see signs of other emerging services.
Components of Optimized PHM
Is the PHM hiring activity among provider organizations going to converge with the role’s mirror image on the payer side anytime soon? Or, is the industry bulking up on PHM positions in all organizations as simply the new way of doing business? What is the extent of the service development opportunity here for HIT vendors?
To build (PHM consulting and support services) or not to build? HIT vendors are in the midst of trying to forecast what services to develop. This question begs for future in-depth research to determine market appetite for which particular PHM services, what are the win themes, and what outcomes are being achieved from such services.
