Paliwal Divya

The rising costs of health care coupled with care quality concerns are pushing healthcare organizations and regulators to develop new care delivery models that move away from fee-for-service and toward a more value-based care approach. Accountable care organizations (ACOs) constitute a spectrum of entities that are founded on the tenets of shared accountability, data transparency, and financial payments and incentives that are tied to health outcomes. (We refer to the term ACOs here in a generic sense to encompass more than just Medicare-sponsored certified entities.) For an ACO to succeed and be sustained as a financially viable entity, it must keep the patient population healthy. Bill FeraA coordinated proactive approach across various care settings and a focus on prevention and chronic disease management are necessary. Effective population health management thereby becomes the foundation for a successful ACO. 

Building a sound population health management approach requires a strong focus on four key areas.

Identifying and stratifying the patient population. ACOs need to understand the risk they assume when entering into shared-saving or shared-risk programs. They must identify the key characteristics of the patient population they are serving. To do so, they require a sound data infrastructure with predictive analytics that help identify and stratify patients by criteria such as health risks, conditions and care management gaps, utilization trends by settings, and costs. A thorough understanding of the patient population will enable an ACO’s leaders to identify focus areas for improvement, decide the extent of risk they are willing to take on, and negotiate contracts appropriately.

Developing a collaborative care delivery model. A multidisciplinary care management team that addresses patient care needs holistically is fundamental to the accountable care paradigm. Tools such as care plans, case management and social worker support activities, and rules engines—which provide action items for providers and care teams to treat and follow-up and also engage the patients in managing their health—are helpful in providing this holistic care. ACOs must also not only appropriately deploy but also continually reassess resources utilized to effectively manage different categories of patients. 

Engaging patients. Making patients aware of their health risks and equipping them with tools for care management are ways to help empower them to take charge of their health. ACOs should provide patients with aids such as online portals, patient education materials and monitoring tools, health coaching, outreach programs, and incentives for changing behavior. The quality of member interactions and resulting experience can influence patient behavior and, as a result, health outcomes. 

Implementing a data- and outcomes-driven approach. Effective management is not possible without measurement. A well-conceived data warehouse environment with accurate data from multiple sources and powerful analytical capabilities is imperative to deriving actionable insights upon which the organization can develop its future strategy and operations. ACOs are also required to regularly share quality outcomes and cost metrics with their payers as part of their contractual obligations and to meet financial rewards. 

Effective population health management helps ACOs achieve their clinical and financial objectives. The biggest winner, of course, is a healthy and empowered community.  

The views expressed herein are those of the authors and do not necessarily reflect the views of Ernst & Young LLP. 


Divya Paliwal, MD is a manager in the Advisory Health Care practice of Ernst & Young LLP. She is based in Washington, D.C.

William A. Fera, MD is a principal in the Advisory Health Care practice of Ernst & Young LLP. He is based in Pittsburgh, PA. Follow Bill on Twitter: @BillFeraEY 

Publication Date: Monday, December 23, 2013