The journey to value: Taking the first value-based steps with population health management-Part 1

In our previous Journey to Value post, we suggested four elements that organizations should consider as they as they determine their roadmap for value-based care. With a roadmap that accounts for market needs, financial impacts, provider network strategies and aligned incentives, organizations are ready to program the milestones around which they will convert to value-based care. Carefully sequencing clinical transformation with financial transformation is key to capturing the most value from the volume-to-value journey.

Conducting clinical transformation without carefully coordinating financial initiatives is self-defeating. Payer-contracting programs must drive value from increases in quality and reductions in the cost of care. With both strong clinical and financial structures in place, the stage is set for the volume-to-value transformation.

It all starts with leadership that is willing, not only to invest in the components necessary for value-based success, but also to promote fee-for-service models while they exist. The key, as many organizations have discovered, is to focus on capabilities that overlap the two models. Two such capabilities are population health management (PHM) and clinical and financial analytics.

Under a fee-for-service system, PHM helps organizations improve outcomes, quality and patient satisfaction, which leads to better reimbursement and more favorable payer contracts. Under a value-based system, PHM is a basic necessity for improving outcomes and reducing costs.

This isn’t a novel concept, but most health care providers don’t have much experience with PHM. For years, payers have invested in PHM programs, with mixed results. Using remote care management teams and claims data that was, likely, at least 60 days old, their programs operated from a limited perspective. The programs typically targeted specific conditions using remote outreach models that were not integrated with the physician.

In value-based models, however, provider organizations take responsibility for the health and overall costs of a defined population. Physician-led PHM can work better, not only because physicians have face-to-face access to patients, but also because they have access to real-time patient data. These advantages allow organizations to structure care teams led by physicians or care managers that can engage patients quicker and closer to the point of care. High-risk populations are the most logical starting point for PHM programs.

And providers are finding success through population health management. For example, a hospital system in the southwestern United States assigned a care manager to engage each month with 75 to 100 of the highest consumers of hospital care. The care manager regularly met patients in their homes and during hospitalizations — and sometimes accompanied them to appointments — all while engaging the patients’ primary care physician to facilitate care.

Self-reported data indicated that hospital utilization (admissions, readmissions and ER visits) among the studied population decreased by approximately 30 percent. Based on an average hospitalization cost of $13,000 in the service area, the hospital system believes the decrease in utilization amounts to a cost savings of about $1.5 million.

Journey White P aperWe mentioned clinical and financial analytics above as another capability that organizations will need as they transition from volume to value. We’ll discuss how providers can integrate those functions in our next post.

For more on this topic, download our latest white paper The journey from providing care to managing health.

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