Frost Radar—US Population Health Management Market, 2021
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After pausing while the US healthcare industry struggled to contain COVID-19, the stringent audit process for value-based care (VBC) is back in full swing for 90% of Medicare reimbursement that is currently attributed to some form of quality or risk-based payment plan. Additionally, CMS has launched new guidance for value-based reimbursement among the Medicaid population, in which 67% of reimbursement remains fee-for-service (FFS). The expanded scope of VBC will compel health systems to invest in a range of public health management (PHM) capabilities that cover all types of government-sponsored health insurance and demonstrate proven ability to meet quality performance criteria for specific insured populations (e.g., Medicare Advantage, Medicaid Advantage, and Long-Term Services and Supports).Accountable care organizations (ACOs) are increasing their enrollment into risk-based payment plans (from 9% of all ACOs in 2017 to 74% in 2020) and driving adoption of PHM solutions that aid cross-continuum data interoperability and integrated care management. However, next-generation ACOs (NGACOs) that pioneered adoption of VBC payment plans are failing to report the desired business outcomes. In fact, 50 such NGACOs reported additional spending of $93 million in the first 2 years of their program against savings of $86 million, which they reported in the first year of the same program. Consequently, they are devising PHM strategies that guarantee improved financial outcomes while being clinically result-oriented and operationally streamlined. In a field of more than 50 industry participants, Frost & Sullivan independently plotted the top 11 companies in this Frost Radar™ analysis. The Radar™ reveals the market positioning of each company using its Growth and Innovation scores as highlighted in the Frost Radar™ methodology. The document presents competitive profiles on each company based on its strengths, opportunities, and market positioning. We discuss strategic market imperatives and the competitive environment that vendors operate in as well as make recommendations for each provider to spur growth.
The purpose of this research service is to present a comprehensive competitive analysis of the US PHM market. After a slump in 2020 caused by the prioritization of essential COVID-19 services, the US population health management market is back on a rapid growth trajectory. This is due to pervasive adoption of quality or risk-based payment plans across both commercial and government solutions. Frost & Sullivan forecasts that in 2021, the US PHM market will generate revenue of $7.59 billion, or 31% higher than in 2020. The payers and payer-providers segment will remain the top revenue contributor. Its share as a percent of total revenue is expected to increase to 47.4% in 2021 from 43.4% in 2020. This is the only segment that will contribute more than $1 billion toward PHM in one financial year (FY 2021). Such high growth is attributed to payers’ focus on personalized care management for all members across the care continuum. Payers will leave no stone unturned to reduce preventable clinical utilization among existing members, close financial gaps across its provider networks, and widen reach to non-insured or under-insured consumers. The other top growth enabler in terms of aggregate market revenue is ACOs. This segment will contribute 36.4% of the total market, or $600 million more in 2021 than in 2020. Most ACOs (including self-insured employers that voluntarily embrace VBC plans) are not delivering the desired outcomes. As a result, they are opting for pure-play capabilities that will improve the performance of their incumbent PHM programs, which are slated to continue for at least another 3 to 5 years. Dedicated attention is now given to specific chronic conditions for which CMS has plans to reimburse the cost of PHM IT across the care continuum. End users will merge virtual care platforms in PHM workflows to aid evidence-based patient management at a community level.
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