The key to efficiency under value-based care models is a strategic approach to risk stratification.
It’s nearly unanimous: 98% of healthcare executives believe population health management is important for their organizations’ future success, according to the results of a survey released in August. A combined 93% of respondents rated it between moderately and critically important.
These population health care models are often tied to some type of value-based care (VBC) payment, which rewards positive health outcomes and cost control. When asked about VBC, the same surveyed executives expressed concern about the possibility of financial loss when patient outcomes are linked to such payments. Only 31% of respondents reported they were at least very prepared to accept financial risk for managing patient populations.
Much of the concern over population health management may stem from the sheer number of patients attributed to an accountable care or some other type of population health management program. ACOs and health systems can suffer significant financial losses in risk-bearing VBC payment models when such care is not delivered strategically and efficiently. Certainly, every patient deserves the highest-quality care, but only a small segment requires the resource-intensive care outreach and management that can drive up costs and drive down VBC financial performance.
Risk stratification is the key to an efficient population health management program. ACOs and health systems understand their highest-risk patients are often their most expensive and the most challenging to manage. This is also true on a national level. A RAND study published in 2017 found that although only 12% of U.S. adults have five or more chronic conditions, they account for 41% of healthcare spending. Similarly, according to data from the Partnership to Fight Chronic Disease, the average annual healthcare cost for an American with no chronic conditions is $6,000. For people with five or more chronic conditions, the annual cost per person soars to $45,000.
Multiple chronic conditions do not only affect the frail, elderly population, either. The RAND study found that although patients, age 65 and older are most likely to have multiple chronic conditions, approximately half of the patients in their mid-40s to mid-60s also fall into that category.
Identifying and devoting care management resources to the highest-risk, highest-need patients is a well-established best practice for ACOs and health systems. The key to efficiency and success under VBC models, however, is a more strategic approach to risk stratification. The strategy involves targeting nonelderly patients highlighted in the RAND study between the fifth and 20th percentile of risk. These “rising-risk patients” likely have conditions, such as diabetes or hypertension, but overall are healthy. However, if left unmonitored, one in five of these rising-risk patients will escalate into the high-risk bucket annually. Given rampant nursing shortages, a lower-touch, automated approach with rising-risk patients eases burden on care managers while helping to increase adherence to care plans across a broader swath of patients. In this way, proactive intervention can be taken only against patients who need it, helping to avoid costly emergency department visits and hospitalizations.
As the manufacturing industry learned many decades ago, efficiency boils down to eliminating unnecessary steps and automating processes wherever possible. While patients are not cars or refrigerators, healthcare organizations that want to succeed in population health management and value-based care can still learn from these business principles.
In population health, for example, data management represents a major opportunity to automate processes based on identifying and highlighting patterns within said data. Collecting, analyzing, and sharing data across disparate sources, including multiple electronic health record systems, claims, public disease registries, and elsewhere, can be time-consuming and unproductive. Moreover, care managers using this data are often nurse-level clinicians who are increasingly receiving larger salaries due to the major labor shortage across the industry. Any minute spent on repetitive processes that can be avoided with automation is a minute they are not managing patients. Wasting this time is costly for the health system and does not support scaling optimal patient outcomes.
Fortunately, after starting from nearly ground zero at the dawn of the Internet era, the healthcare industry has made some strides in eliminating data silos and the manual effort historically associated with health data management. Building on this progress, efficient population health management today requires the right tools in terms of both back-end infrastructure (databases and analytics platforms) and “last mile” solutions, such as remote patient monitoring and apps for patient engagement, clinical coordination, and Hierarchical Condition Category (HCC) coding.
By using data and engagement capabilities (including texts, emails, and automated phone calls) to monitor and gather information from these rising-risk patients, providers can gauge whether a chronic condition is trending in the wrong direction and intervene before the patient becomes high-risk and high-cost. That’s effective and efficient population health management in action.
When dedicated physicians, nurses, and other clinicians waste time and effort, healthcare organizations are also squandering opportunities to deliver high-quality patient care and improve financial performance more broadly across their at-risk patient populations. Since there is a finite supply of healthcare with an ever-increasing demand, ACOs and health systems need to adopt automated, efficient population health management strategies to help them extend their reach well beyond their highest-risk patients.
Implementing technology to handle the time-consuming data management tasks empowers care managers and other clinicians to practice at the top of their licenses and productively deliver cost-effective preventive care that improves patient experience and results in optimal outcomes.
Patrick Burton is the vice president of business development at Lightbeam Health Solutions.