Population Health Management: Systems and Success
How to Define Population Health Management
Multiple, disparate definitions for population health management abound. Yet, population health management should be defined the same way public health was defined years ago by C.-E.A. Winslow, founder of the Yale Department of Public Health, as:
“the science and art of preventing disease, prolonging life, and promoting health through the organized efforts and informed choices of society, organizations, public and private communities, and individuals.”
This definition gives the healthcare industry a model to use when moving forward with population health management strategies to improve outcomes—the public health system.
Introduction to the Current State of Population Health in the U.S.
The U.S. spends more on healthcare, yet has a lower life expectancy and worse health outcomes, than any other high-income nation according to a 2015 study from the Commonwealth Fund.
Why the disparity? Other countries have been doing something the U.S. has not—applying public health concepts to chronic disease management. The economic models of countries such as France, Germany, and Norway align with controlling costs while producing better outcomes. As an illustration, private healthcare spending in the U.S. is five times that of the second-highest spending country (Canada). And despite this astronomical private spend, the U.S. is also third-highest in public spending, despite only covering 34 percent of residents through public programs including Medicare and Medicaid.
The higher costs in the U.S. are not producing better outcomes. Of the countries covered in the Commonwealth study, the U.S. had the lowest life expectancy at birth—78.8 years. And it performs equally poorly for chronic conditions such as diabetes (third-highest rate for lower extremity amputations as a result of diabetes) and ischemic heart disease (highest mortality rate).
What does this say about the nature healthcare in the U.S. compared to other nations? The encounter-based medicine practiced most commonly today is not working for population health. Instead, U.S. healthcare systems need to learn from public health programs and apply those lessons when managing chronic conditions across populations.
Eighty percent of what affects health outcomes is associated with factors outside the traditional boundaries of healthcare delivery—health behaviors (tobacco use, sexual activity), social and economic factors (employment, education, income), and physical environment (air quality, water quality). When healthcare delivery systems expand their interactions with people in these territories, now the purview of the public health system, outcomes will improve.
How to Move Population Health Management Forward and Improve Outcomes
With rare few exceptions, healthcare delivery systems have never had to deal with the socioeconomic and social determinants of health to the degree that public health systems have faced these issues. Healthcare delivery systems must add public health professionals and epidemiologists to their management and executive staff. They need to build the skills to interact with and develop health intervention strategies in concert with law enforcement; social support services in the community, including charitable and religious organizations; job growth and economic development in communities that ensures people can afford care when they need it; adequate affordable housing in the community; healthy options for eating in the community; adequate dental care; primary and secondary education programs that encourage healthy lifestyles; violent crime reduction; and environmental strategies to ensure that communities have clean air and water. These are the sorts of issues that public health professionals have been managing for years in the progressive reduction of infectious disease in communities. Now the U.S. needs to follow the lead of other countries and apply those public health skills to the new setting of chronic condition management in the community.
Three Important Data Sets Required for Population Health
While it’s true that healthcare is transitioning away from a traditional fee-for-service business model to a model that incorporates value into the payment equation (and thus encouraging efforts similar to public health strategies), it has a long way to go to equal its peers in the international community. Many health systems don’t have the data and technology to support this transition. The absolute minimal data sets required for this work include: 1) patient-reported outcomes data, 2) social determinants of health data, and 3) activity-based costing data that will allow accurate management of financial margins in per-capita reimbursement contracts. Without these three pieces of data, an organization can never achieve the aspirations of value-based care—managing populations of health and creating better patient outcomes for an efficient cost.
What’s Missing in Most Population Health Solutions
EMRs currently on the market are designed for a fee-for-service world, running entirely on encounter-based medicine. This makes it difficult to manage the health of populations—and difficult to understand the cost of care. Fundamentally, in a population health environment, a health system is managing to margins on a per-member, per-month (PMPM) basis. And in this environment, everyone has to be aware of the cost of care, at the point of care; something not possible without major changes to the software of current EMRs.
Additionally, claims processing systems and revenue cycle software don’t address the issue because they are also encounter-based, adjudicating encounters on a line by line basis on procedures and tests (what’s allowed, what’s not allowed). These systems fail in a capitated PMPM environment because they don’t consider what care went into the encounter; that’s left up to the care providers.
Getting to Population Health Success
Population health assumes that healthcare organizations engage people beyond the shorter timeframes often seen in today’s ACOs. Population health strategies will extend beyond the current episode-based framework of patient care. Part of this relationship building means that organizations will have to invest in people, then measure how well that investment is affecting the health of the person and the level of that person’s engagement in his/her own health.
Healthcare organizations starting population health will quickly discover that the highest-risk patients from a clinical perspective (for example, those in an obesity program) will not always return the most improved or best possible outcomes. In other words, the highest-risk patients are often those who are beyond the ability to intervene and actually change their outcomes. While new best practices that deliver better outcomes for these patients may (hopefully) be someday discovered, the reality is that—in a capitated environment with limited resources—there are rising risk patients who will benefit more from those resources and higher levels of engagement.
The Population Health Equation and Return on Engagement
If the fundamental, traditional Healthcare Value (HV) equation is defined by the Quality of Care (QoC) plus Experience (E) divided by the Cost of Care (CoC), or HV = (QoC+E)/CoC, then the fundamental equation of population health will be the calculation of Return on Engagement (ROE), that is the Clinical Outcome Achieved (COA) divided by the Total Patient Investment in a Patient’s Health by the Healthcare System (TPI).
|ROE = COA/TPI|
Described otherwise, “How much does it cost our population health management system to increase a patient’s clinical outcome by one unit of measure?” This is why the understanding of costs and patient outcomes is so fundamentally critical to the success of population health.
The motive behind a care management system—services and software—is to reduce the investment (TPI) necessary by the healthcare system to achieve a unit of improvement in clinical outcomes (COA) by engaging patients in both the numerator and denominator of their own health.
A New Approach to Population Health Management
All of this leads to population health management in new form. To get there, the industry has to be smart about accelerating development of the right areas and manage expectations about what can be achieved.
For one, the industry needs to do a better job of collecting true patient outcomes data, rather than proxies for care. For example, it inherently does not matter if a person with diabetes has had a foot exam—but it matters very much if that foot exam discovers an open wound that will not heal.
Additionally, organizations must also understand cost at a granular, individual level instead guessing at costs by looking at average cost of overall patients or members. That approach is almost meaningless when managing margins.
The Health Catalyst® Approach to Population Health
With all this in mind, Health Catalyst is developing its product strategy for this new population health environment on two fronts.
One: increasing a health system’s ability to manage risk-based contracts and bundled payment models. This includes making sure healthcare organizations can understand cost in a population health context and can manage that cost, while also ensuring that everyone is aware of margins all the time.
This is the first real manageable step in population health—managing the margins in PMPM bundled payment contracts. Before a healthcare organization can launch into gathering outcomes, socioeconomic data, or using a care management application, it must first understand the costs of care.
And two: relationship building and care management that provides health systems with tools such as patient and member risk stratification, enrollment in risk-based plans, and care communication among members of a patient’s care team. Health Catalyst is actively borrowing from well-established socially driven environments (facebook, slack, patients like me). This is because one of the critical—and more awkward—topics in the future of population health is that notion of return on engagement (see above). One approach for all patients does not work. Patients have to be capable and willing to participate in their own care to achieve the highest possible outcomes. This means high-risk people also include those who, from an algorithm perspective, are least willing to participate in their own care. A health system must adjust strategies to reflect that risk and distribute care management resources accordingly. The solutions that Health Catalyst has developed will help organizations do just that.
Health Catalyst Vision
“I can make a health optimization recommendation for you, informed not only by the latest clinical trials, but also by local and regional data about patients like you, the real-world health outcomes over time of every patient like you, and the level of your interest and ability to engage in your own care. In turn, I can tell you within a specified range of confidence, which treatment or health management plan is best suited for a patient specifically like you and how much that will cost.” (Inspired by the Learning Health Community www.learninghealth.org)
Read Case Studies of Successful Population Health Management Efforts
Managing Half-a-Million Risk-contracted Lives: Partners HealthCare Population Health Strategy
See how Partners HealthCare is reengineering care delivery to provide a higher quality of care at a lower price by successfully managing risk-based contracts within all major payer categories.
Patient Identification and Matching—An Essential Element to Manage Population Health
See how one healthcare delivery organization is solving the patient-to-patient and provider-to-provider matching problem through the use of a data warehouse.
Using Advanced Analytics to Manage Population Health in Primary Care Clinics
Managing populations of patients requires a proactive approach to delivering care, ideally suited to the primary care provider setting. Here’s how one primary care provider organization is using analytics to improve the outcomes for its populations of patients.
Community Care Physicians Deliver Effective Population Health Management with Clinical Analytics
See how one healthcare organization used analytics to concentrate on care management and move its population health efforts forward.
Read More About Population Health
A Landmark, 12-Point Review of Population Health Management Companies, an executive report from Dale Sanders, Executive VP of Software
What Is Population Health and How Does It Compare to Public Health? By Leslie Hough Falk, Customer Engagement VP
From Care Management to Population Health Management, an executive report from Brent Dover, President
Understanding Population Health Management; A Diabetes Example By Michael Barton, Engagement Executive VP
Population Health Management: One Example that Shows Why It Really Matters By Kathleen Merkley, Clinical Improvement VP
Why the Solution to Population Health Management Woes Isn’t an EMR By Dr. David Burton, former Executive Chairman
The Best Way to Prioritize Your Population Health Management Efforts By Dr. David Burton, former Executive Chairman
Population Health Management: Implementing a Strategy for Success, a white paper from Dr. David Burton, former Executive Chairman
Health Catalyst Improvement Applications
Patient Stratification supports the management of cost, risk, and utilization for complex patients. Users can build and analyze different stratification algorithms based on proven risk models and patient utilization to rank and ultimately determine the most important candidates for intervention through care management.
The Bundled Payments analytics tool evaluates cost and variation associated with care delivery for patients, and is intended to prioritize areas of focus and provide a baseline for exploratory analysis. The application is modeled on the CMS Bundled Payment for Care Improvement (BPCI) Initiative.
PMPM Analyzer supports a holistic evaluation of the drivers of per member per month payment performance. This claims-based tool gives an in- and out-of-network view of payment trends, and gives users the ability to understand how an ACO’s procedures, providers, patients, and specialty areas are contributing to overall PMPM payment performance.
ACO Explorer is an executive-level dashboard for monitoring ACO health. Review trends and performance against targets on key metrics for per-member-per-month performance, leakage, and utilization. The performance dashboard will include ACO measure performance if the organization has deployed ACO Measures as well.