Organizations can experience greater success in moving to an integrated population health management model if they appoint an integrated leadership team, plan carefully, and develop the right infrastructure to manage multiple elements of care. 

At a Glance

Successful integrated population health management models include:

  • A leadership team that includes financial managers, physicians, and advisers 
  • A plan that clearly connects tactics to measurable goals
  • Infrastructure that includes care coordinators and robust IT to avoid duplicative care and ensure care protocols are followed  

As healthcare delivery and financing shift from a volume-based to a value-based business model, providers need to deliver the best possible quality, outcomes, and access for the lowest possible cost. Population health initiatives take that perspective even further by focusing on the integrated healthcare needs of specific populations. When successful, integrated healthcare ventures can not only improve accessibility of care, quality, and satisfaction, but also reduce duplication of efforts and costs.

For example, people with diabetes often require care from a primary care physician, a dietitian, an endocrinologist, a podiatrist, an ophthalmologist, and an exercise physiologist. An integrated population health venture will allow a patient to receive care from each of these disparate providers along a well-coordinated care continuum. Because each provider is able to access the same data and take into account the care delivery decisions made by the other providers who are seeing the patient, the risk that two providers might work at cross purposes or duplicate each other’s efforts is virtually eliminated. The patient’s confidence in the care delivery process is bolstered by the knowledge that all the providers share essential information, including personal information and the reason for the original visit, obviating the need for the patient to provide that same information repeatedly with each visit. 

There are many models for achieving this level of integration, ranging from full ownership of all of the components of care to affiliations that involve substantial information sharing. Recent healthcare reform initiatives have focused on the development of accountable care organizations (ACOs), for example, which can be variously structured through ownership and/or affiliation arrangements. 

The need for fully coordinated care makes population health management an especially complex proposition, however, requiring a significant shift in mindset for everyone involved. Approaching population health management by centering on three key pillars—leadership, planning, and infrastructure—can help healthcare leaders successfully meet these challenges. 

Pillar No. 1: An Integrated Leadership Team

The effort to adopt an integrated population health model should be overseen by a leadership team that includes key finance executives, physician leaders, and advisory board members. The team members should share expectations regarding success metrics, mutual trust among all stakeholders, and shared savings so they can effectively address the shift from a fee-for-service to a value-based model.

Success metrics. The primary success metric should be the overall health of the population. In a traditional fee-for-service model, hospitals must fill beds. In a population health model, the goal is to keep patients out of the hospital. Three quantifiable metrics that relate to overall health of the population are:

  • Hospital admission rates per thousand people
  • Hospital readmission rates per thousand people
  • Hospital inpatient days per thousand people

The goal is to continuously reduce the rate in each of these three metrics.

Mutual trust. Although payers and healthcare providers may view each other as adversaries in the traditional fee-for-service world, they cannot be at odds with each other and expect to succeed with population health management. All stakeholders must understand their roles in keeping patients healthy from both a quality and a cost perspective. This need for mutual trust cannot be overemphasized; without it, even the most well-conceived plans will not be achievable.

Shared savings. Expectations for shared savings should be clearly understood and agreed upon by all members of the team. The need for stakeholders to reduce costs before seeing ROI can cause anxiety and can lead to an unnecessarily tentative pursuit of key goals. 

To support a successful transition to an integrated population health management model, leaders of the transformation team should include the CEO, the CFO, and the chief medical officer. The team should coach physicians and staff members through the change. Some organizations choose to manage this process themselves; others engage a third-party team to work with leaders in guiding the move toward an integrated model. 

Pillar No. 2: A Clear and Well-Communicated Plan

Whether the goal is an enterprise-level integrated network, such as a hospital or health system organization that employs physicians, or the alignment of individual medical practices with multiple tax IDs, an ill-defined business plan can doom the effort. Concepts such as quality of care, successful outcomes, and financial expectations should all be clearly defined and connected to specific tactics for achievement. 

Leaders should take specific steps to ensure that all physicians and staff members are aligned in pursuit of a common purpose. That means sitting down with these stakeholders to clarify expectations, explaining that the organization is shifting away from episodic care to coordination of ongoing care of a given population. The plan for moving toward an integrated population health management model also should establish specific tactics for working with payers, such as entering into multiyear contracts that include gainsharing and other incentives to reduce medical costs. From there, leaders should connect each goal to specific tactics. Leaders should not rush to establish tactics before the purpose and plan are fully defined and agreed upon, because effective tactics require a clear goal. 

Next, the business plan should address how staff members are to be educated on the organization’s goals and tactics and each person’s specific role in achieving those goals. This educational component can be time-consuming, but its importance should not be underestimated. A deep understanding of what constitutes population health management success is possible only through a concentrated, ongoing effort, not a one-hour “lunch and learn.” 

Pillar No. 3: A Solid Infrastructure

The infrastructure of an integrated system is essential to its success. Although the overall structure of the system will vary widely, common infrastructure elements include a network of care coordinators and a robust IT system. 

In many organizations, nurses will become the care coordinators, following patients through multiple elements of care and discussing care with physicians to ensure that the appropriate protocols are followed and to help avoid duplication of efforts and incompatible plans of care. 

For example, a woman with rheumatoid arthritis would probably turn to her primary care physician for basic healthcare services. A knowledgeable care coordinator would inform the physician of tests already ordered by the patient’s rheumatologist and what drugs the patient’s psychiatrist has prescribed to manage her depression. 

In some models, the care coordinator also is the patient’s primary point of contact; in others, the care coordinator serves as an adviser, helping the patient understand why key tests must be performed, when specific medications should be taken, and why a particular activity is critical to the patient’s long-term health. The care coordinator also should be able to review each patient’s electronic medical record to ensure that care protocols are being followed and costs are being appropriately managed. 

The right implementation of technology also is critical to the successful launch of an integrated population health management model. Certification as an accountable care organization (ACO) by the Centers for Medicare & Medicaid Services (CMS) makes this imperative because ACOs must report on 33 different measures, at least 22 of which are specific to population health management (see “Guide to Quality Measurement for Accountable Care Organizations Starting in 2012: Agreement Period, Performance Year, and Reporting Period,”). 

Effectively capturing and reporting on these measures requires an integrated IT framework that not only supports information sharing, but also informs clinical decision-making and enhances the organization’s data analytics capabilities. This framework should include a robust electronic health record (EHR), population health data registries, and tools for data analysis and presentation. 

Leaders should look for several characteristics in the IT system. For example, an important characteristic of an EHR is its ability to provide relevant medication and allergy alerts as well as up-to-date information regarding a patient’s health history across multiple medical areas. An integrated population health management model should take advantage of cloud computing technology, which delivers secure access to information without requiring expensive hardware or software. Its IT system should be easy to use and maintain. And it should provide care coordinators with clear, actionable health data while also providing the leadership team with vital financial and operational statistics and metrics.

Putting It Together: Guiding Principles 

When building these pillars, CEOs, CFOs, and chief medical officers should keep several key principles in mind.

The balance of quality care and cost control must be maintained. That’s why care coordination is such an important component of the organizational structure. Too much attention to cutting costs can impede progress toward quality-of-care goals, while overutilization of certain tests and reliance on high-cost facilities may hinder success with cost-control goals. With that in mind, CEOs and CFOs should work to: 

  • Understand total costs of care within the organization
  • Manage the network of physicians, hospitals, and payers and understand how it operates
  • Engage physicians in reducing the need for readmissions

Demonstrated savings will drive payment. In a value-based model, savings are shared among three parties: healthcare providers, payers, and patients. That’s why transparency is so critical and why leaders engaged in this type of transformation should:

  • Understand contractual terms from every partner in the healthcare continuum
  • Ensure thorough, well-informed care coordination
  • Vet costs while simultaneously improving quality 

A new model will not solve old problems. Going from a fee-for-service model to a value-based model will not provide a quick way to eliminate existing problems in a healthcare organization. However, making this type of transition can provide an excellent opportunity to closely examine and improve processes. So before beginning the transition to a shared-savings model, leaders should ask: 

  • Is our organization healthy today?
  • Do we have good physician leadership?
  • How efficient are our operations?
  • Do we have a good handle on cash management, billing and collections? 
  • What works - and what needs to be fixed?
  • Do we have the right team to go through this transformation?

All of these components must be stable and healthy today to weather a transformation 

tomorrow. Going to a risk-based payment or shared-savings model is difficult without stable operational structures in place, no matter how big or successful an organization is.

Building the Pillars 

Building the key transformational pillars as simply, directly, and objectively as possible leads to the best outcomes. Staying focused on this premise will ensure that operations and management are on target. 

When approached from this systematic, balanced perspective, integrated healthcare ventures can achieve the benefits of shared savings while delivering more efficient, accessible, and effective care and improving satisfaction for everyone. With transparent, well-aligned leadership, a clearly understood purpose and plan, and solid infrastructure, the shift from fee-for-service to a value-based, population health management model can benefit all players.  

John Wallace is senior vice president, McKesson Business Performance Services, Alpharetta, Ga.

Publication Date: Tuesday, April 01, 2014

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