Defining a path for population health management success

Feb. 27, 2018
Amy Flaster
MD, MBA, Vice President Population Health Management and Care Management Services,
Health Catalyst
Jonas Varnum
MHA, Population Health Management Consultant,
Health Catalyst

Population health management (PHM) has joined healthcare’s buzzword soup. Multiple definitions dominate the industry, confusing leaders on where to begin and what is important. However, organizations do agree that PHM is vital to their success—a 2017 Health Catalyst survey of 199 healthcare leaders found that nearly 94% said it is at least somewhat important to their healthcare delivery strategy during the next two years. Additionally, most are invested in using their PHM models to drive payment transformation in their organization—80% of organizations believe they will have at least 30% of their contracts incorporate at-risk payments over the next five years.

With prevalent industry focus, organizations find themselves asking three key questions: 1) where are we now; 2) where do we need to be in order to thrive in value-based care; and 3) how do we get there? Each of these questions should be answered tailored to each organization’s unique culture and characteristics, but understanding the key PHM competencies and leveraging a three-step framework can support sustainable PHM success.

Key competencies

Successful population health management delivery models—whether built as multisystem Clinically Integrated Networks, limited-scope Accountable Care Organizations, or self-insured employer groups—have similar competencies. First, these systems foster strong governance, and foster participant (both clinician and manager) engagement. This process-driven step allows participants the adequate structure to make difficult financial, clinical, and patient-focused decisions over the long-term, while engaging clinicians in the process.

Second, successful PHM programs take a data-driven approach to opportunity identification. With an eye toward identifying both short-term and long-term opportunities, these organizations invest in building a foundation of analytics and derive insights from disparate data sources wherever possible.

Lastly, successful PHM organizations leverage their PHM infrastructure and deep knowledge of financial and clinical data to make strategic decisions about entering into further at-risk contracts. These organizations are not beholden to value-based care agreements, but rather enter into them as part of a larger strategic shift within the organization. An organizational sense of urgency about moving into true at-risk contracts (i.e. non-upside only agreements) can propel long-term PHM sustainability.

Understanding these key competencies, organizations find success when using a three-step framework for their PHM transformation, with data playing a critical role at each step.

Step 1: Data transformation

Until recently, healthcare organizations were satisfied by having access to patients’ clinical data, which provided a window into the care the patients were receiving within the four walls of their system. Not so, today. A broad range of data sources is needed to understand the care patients receive across the continuum, and as such, health systems that are moving into value-based care must strategically invest in data infrastructure.

To achieve insights, provider systems must first prioritize their data sources. Claims data is often the best place to start for PHM because it allows a cross-continuum view of all the care being delivered to patients being managed in at-risk contracts.

The second key to data transformation is for health systems to educate stakeholders about the benefits and limitations of available data. Doing so avoids wasting time and resources
trying to get the data to do things it is not capable of doing. Strong governance and participant engagement aids these conversations.

A third key area of focus is developing data-specific definitions and supporting logic around how the data interacts with critical payment levers. Often, stakeholders become disenfranchised upon learning how attribution, quality definition components, and other attributes of the data can impact their ability to accurately measure performance within at-risk contracts. It is therefore crucial that these topics are addressed early.

Step 2: Analytic transformation

Analytic transformation answers both the “where are we now” and “where do we need to be” questions, incorporating opportunity identification and structured analysis of financial, clinical, and operational priorities in order for a provider system to develop their PHM roadmap.

Initially, health systems begin by gathering and reviewing all available information through a number of approaches. This process may include interviewing key stakeholders, analyzing available data, reviewing contractual requirements, exploring leaders’ priorities, documenting current and potential pitfalls, and developing intra-departmental teams to champion work. In aggregate, this information can then be used to identify quick wins, as well as longer-term opportunities for the organization.

Next, successful PHM systems will synthesize and simplify the gathered information. Financial and clinical leadership must work side-by-side with data experts to create a non-siloed, PHM priority map. This map can delineate which payment and care transformation levers are to be implemented at what time. Over time, systems continuously evaluate and analyze this information to make ongoing iterations and improvements to their PHM roadmap.

Step 3A: Payment transformation

This step is multifaceted. Payment and clinical transformation are symbiotic—adjusting operational tactics to decrease costs needs to incorporate clinical evaluation and thorough delivery redesign. Each transformation effort requires tweaking key operational and clinical levers to provide better care at lower costs.

Often, an initial payment lever that systems focus on is utilization management. High-cost imaging, specialty pharmaceutical drugs, and post-acute care delivery are areas ripe for operational redesign. While working on these initiatives, it is helpful to lean on the established governance mechanisms; utilization management changes require key clinical involvement.

The second lever that organizations often explore is coding. Both fee-for-service and at-risk payment contracts are foundationally tied to patient acuity. It is crucial for organizations to ensure that they have systems in place to accurately code in order for their providers to get paid for the work they are doing and the risk they are managing. Strong coding strategies enable organizations to successfully straddle multiple contracting categories.

A third lever to explore is cost accounting—finding a way to lower the actual costs of care delivery. By investing in accurate costing systems, organizations can enter contract negotiations with better information (e.g. when negotiating appropriate benchmarks). Accurate costing data empowers provider systems to take on additional risk in value-based contracts with increased confidence.

Step 3B: Care transformation

While succeeding in value-based care does require several strategic shifts in a health system’s business model, it also provides the exciting opportunity for provider systems to transform the care they are delivering for the better. One important aspect of care transformation is streamlining quality measures—a high-value undertaking with varying effort required. Directing physicians to a few carefully selected performance targets, rather than individual targets for each payer, can ensure clinical appropriateness and better performance while minimizing financial risk—and physician burnout.

Another high-yield activity for care transformation is optimizing care management. Successful PHM organizations leverage analytics to risk-stratify patient populations, creating the correct care management staffing arrangements to optimally manage patients. Care management programs are both highly effective and highly expensive, and it is crucial that they are targeted toward the most impactable patient cohorts.

Additionally, investing in a robust primary care infrastructure is key. The primary care clinic is the platform upon which all PHM activities and programs are delivered. Furthermore, today’s patients are getting their primary care in a diverse range of settings, and it therefore behooves provider systems to identify how varied primary care environments, including urgent care centers, extended hour clinics, and telemedicine visits, can support PHM services.

Get started

Finally, it’s worth noting that the time is now. The most successful PHM organizations nationally are the ones who dove, or are diving, headfirst into value-based care. Driven by a deep commitment to bending the cost curve, these organizations have asked themselves the three key questions—where are we now; where do we need to be in order to thrive in value-based care; and how do we get there—and yet have decided to kick off the journey without all the answers. PHM offers an opportunity for provider systems to commit to providing higher quality care to patients at a lower cost—and isn’t that what it’s all about?

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