Value Based Payment

Rethinking Health Care’s Triple Aim

October 4, 2017 2:37 pm

Engagement of rising-risk patients in their own care through self-reporting will be necessary if the U.S. healthcare system is ever to achieve the Triple Aim.

In some ways, the Institute of Healthcare Improvement’s oft-cited Triple Aim can be likened to a mythical beast—clearly defined in the imagination yet never seen and only vaguely hinted at by what can be found in the real world. At face value, the basic elements of the Triple Aim seem straightforward:

  • Improve the patient experience of care
  • Improve the health of populations
  • Reduce the per capita cost of health care

The problem is that realizing all these elements together has proven elusive. Although healthcare providers conceivably could improve the patient experience by simultaneously improving the quality of care and delivering better access to care for all Americans, there is much evidence that improving access actually drives up costs.

One could argue that this effect is to be expected—that high-quality care comes at a cost. Yet the reality is that the rising costs of care in the United States have not correlated with improved quality. Indeed, even as annual healthcare spending has surpassed $3 trillion, the average life expectancy for Americans has plateaued, and it continues to fall short of the life expectancies seen in many other high-income nations that spend far less on health care. a

This reality contradicts the underlying premise of the Triple Aim: that improvements in quality can ultimately reduce costs—a premise that has been borne out in other industries, where improving process controls has led to dramatic increases in quality in concert with tremendous increases in profitability and plummeting prices for consumers. Unfortunately, the efficiency trends observed in other U.S. industry sectors have not been replicated in the healthcare sector, where spending has far outpaced the growth of the overall economy. b  

The Challenge

To understand why it is so difficult to improve quality while driving down cost in our nation’s healthcare system, consider a simple example of the competing effects in health care. Getting individuals with chronic disease to consistently adhere to their prescribed medications is widely shown to be beneficial. It improves health, helps prevent adverse events, minimizes complications associated with disease, and reduces the likelihood of hospital admission. This assertion is as true for hypertensive patients as it is for patients with diabetes. From a practical standpoint, however, achieving such medication adherence among all patients is not so easy.

Affordability of medicine is a real concern, particularly among patient members on fixed incomes. Even if patients can afford medicines, they still experience the impact of increasing cost, given that the cost of pharmaceuticals is increasing at an even higher rate than general healthcare spending. And in this example, it is hard to see any impact from improved compliance on reducing costs.

For example, in 222 generic drug groups, costs increased by 100 percent between 2013 and 2014. And the average cost of a cancer drug has increased tenfold since 2000. Moreover, annual drug costs have increased at a rate of at least two times the rest of health care over the past five years. c These rapidly escalating costs for drugs are disheartening when one considers that medication compliance has been shown to help reduce overall healthcare costs in the long-run—particularly in the management of chronic disease. d  

Economic Irrationality

Healthcare economics for health plans are driven by decisions that offset costs for any given year because there is little guarantee that the member in question will be on the same insurance plan next year. And that removes the incentive to do the “right thing” in the year in question. Health plans also lack a strong incentive to improve a patient’s health as the patient nears age 65, because the burden will shift to Medicare. Thus, in the short term, medication compliance translates into higher quality, but at a higher cost, which thwarts efforts to make medication compliance a broadly adopted priority.

Current care management models also suffer from this type of economic irrationality.

Budgets for care management are generally based on regulation compliance—to fulfill quality reporting requirements, to gather information, or to minimize the cost of excessive utilization. Intensive care management efforts focus on members who are very sick, whose cost of care is a clear burden to the health plan, setting low expectations for engagement efforts with these members. In such instances, where expectations for changing the amount of care consumed or improving member patients’ health are nominal, care managers are satisfied in simply showing that patients are being directed to lower-cost sources of care, that out-of-network leakage is being minimized, and that length of stay in skilled nursing facilities is being held under acceptable maximums. In such instances, higher quality care isn’t even a goal.

A study conducted by AHRQ found that the only measure consistently yielding positive results through traditional care management innovation is patient satisfaction. e  There is little-to-no evidence that sustained outcomes improvement correlates with sustainable economic gains. In fact, the interventions that consistently show outcomes improvement are generally driven through in-person visits—a model that has not produced a positive ROI.

Health plans carry both the burden and the privilege of being economically rational. The burden comes in recognizing the cost and likely return of initiatives and the challenge of balancing that knowledge with the core mission and purpose of the health plan, which is to pay for care. The privilege is knowing what things cost and being able to use that information to make good choices.

Key Questions and Concerns Moving Forward

Three fundamental questions arise from the points outlined here:

  • Is improved health care truly more expensive?
  • Is focusing on achieving the Triple Aim simply impractical?
  • Why aren’t health plans changing their current model?

The answer to the first two questions is, in both cases, “Not necessarily.” Improving care while reducing cost is, indeed, possible, as will be discussed below.

In answer to the third question, there are two considerations: Every health plan’s core purpose is to pave an efficient economic path between patients and care, so the current care management model has the appearance of being the best option. It’s reasonable to think all that is required is better integration with electronic health records (EHRs), more data fed into the data model, less latency in the claims feed, and more prescriptive, rigid care protocols. However, such innovations merely eliminate variance in highly variable populations: depersonalizing the highly personal, consigning patients to narrow tracks and strict protocols, and hypothetically eliminating outliers.

Patient engagement strategies based on care managers and care management technology need a revenue component—more physician office visits, better appointment scheduling—to show a positive ROI. f This means that the only way to create a positive economic effect for the care management intervention is to make the overall economics of health care worse: achieving the same quality of care at a higher cost, which contradicts the Triple Aim and defeats the purpose of the innovation except for those entities that profit from the additional service revenue.

A Change of Focus Needed

Again, in answer to the first two questions asked previously, and despite all evidence to the contrary, the healthcare industry should continue to pursue the Triple Aim. It is possible to deliver better care more people and to support broader member groups with enhanced access at a lower cost in both the short and long term. But the care management model must change, and that starts with which members are the focus of care management efforts.

In most populations, roughly 3 to 5 percent of individuals will inevitably require substantial care, and for these people, the only outcome that care management can expect to achieve is to ensure the necessary care is delivered in a timely manner in the lowest cost setting.

However, the next 25 percent of the population, comprising individuals with rising risk, is different. These are individuals who have undergone a care transition or have a complex chronic condition that is moderately well-controlled. The rising-risk population offers an opportunity to reduce both the cost and the amount of care services.

The game changer is utilization improvement as a component of the savings calculation, the goal being to substantially improve admissions and emergency department (ED) use among rising-risk individuals.

To illustrate, consider an actual case where a health plan enrolled a cohort of rising-risk patients with moderate heart failure in daily monitoring. Such patients tend to have admission rates of about three times the average rates for a Medicare population, but they live independently at home and have too few issues to warrant intensive care management.

Patients enrolled in the program answered simple questions about their health each day, but they interacted with care managers only on days when they exhibited concerning variations or aberrations, which they self-reported during their daily check-ins. Because care managers were immediately alerted to problems, all-cause admissions within this group declined by 40 percent, for almost $5,000 in savings per participant. Remote technology also was used to increase the ratio of care managers to participants by a factor of 5. Thus, this approach not only achieved substantial utilization improvements, but also dramatically reduced personnel costs.

Rising-Risk Members Under the Current Care Management Model

Under the care management model that is most prevalent today, rising-risk patients pose a significant risk of high-cost care. Consider, for example, patients who have recently undergone a procedure requiring a hospital admission. A discharge nurse will provide a care plan and do everything necessary to educate the patient on infection prevention, the need for follow-up visits, and rehabilitation. However, from that point on, it is up to the patient to follow the recommendations and seek help if necessary. It’s not feasible to call that patient every day, nor is it realistic to expect that a follow-up call in two weeks will coincide perfectly with the patient’s emerging discomfort. The patient may begin to experience discomfort on day five, and by nine days later, that issue could become a full-blown complication. Thus, a patient who waits for a call, rather than proactively calling his or her physician upon experiencing discomfort, runs the risk of ending up back in the hospital.

The average Medicare admission costs approximately $12,000. g For a health plan, this cost is avoidable, but only if there are no extended gaps in patient engagement. Under the current care management model, member conditions are too variable and the population is so large that no rigid care protocol applies to everyone. Before a health plan can scale care management and engagement of its rising-risk members, at least two things are necessary.

First, the members must self-identify, volunteering when they have an issue that exceeds the normal discomfort of recovery or the normal challenges of a chronic disease. The only person who knows if things are getting worse is the patient, but it is unrealistic to expect each patient will know when it is bad enough to need medical attention.

Second, patients must be engaged in their own care. They must self-monitor, develop healthy habits, and do basic self-care activities that will enhance their ability to be part of their care team.

Herein lies the problem: Neither self-identification nor healthy habits are currently established goals for care management. Meanwhile, the size of the rising-risk pool, which can easily include 10,000 members, can be intimidating. Under a care management model like the current one, where there can be just one care manager for every 50 members, effectively caring for 10,000 members without patient engagement is unrealistic and economically overwhelming.

Even if a health plan hired 200 care managers, the costs of caring for 10,000 members would end up exceeding $20 million, even before any software or program infrastructure costs. Under such a model, the health plan would need to save over $2,000 per targeted participant just to break even. Such a program would struggle to cover costs, let alone yield a positive ROI.

Engaging Patients as an Extension of the Care Team

Engaging members in the rising-risk pool should be a core part of every health plan’s member engagement strategy. These members, if well cared for now, can be supported to keep their chronic disease under control, to prevent unnecessary admissions and readmissions, and to be ideal members in extended care episodes from which they would be otherwise excluded. The additional upside is that by avoiding admissions, the member also avoids the discomfort and inconvenience of days in the hospital, which substantially improves the patient’s experience.

This approach requires placing members at the center of their own care to enable them to be their own advocates, and to care for themselves through a patient engagement and monitoring process set up by the health plan. The premise is that, all too often, a patient’s perspective on his or her own health is discounted in favor of clinical measurements and the point of view of clinicians. Instead, if the member’s experience is validated through self-reported data, the member will self-report when he or she needs help and provide care management with support by embracing good behaviors and taking control of his or her own care.

Placing patients at the center of their own care is inherently scalable because they serve as an extension of their care team. The process would require the following steps.

Identify health plan members in the rising-risk category based on chronic conditions or utilization patterns that indicate a heightened risk and higher likely cost of care. In general, these members have admission rates of three to four times the average population.

Engage, educate, and empower the members to become active participants in their care through daily self-monitoring. The members can be engaged immediately following a hospitalization, including admissions for joint replacement, heart bypass or heart attack, or other high-risk admissions for which monitoring is appropriate.

Encourage patients to interact daily as members of their own care teams through simple, intuitive, ubiquitous technology. This approach avoids the need for cost-prohibitive, dedicated devices, which means it can be implemented without a huge preliminary investment. Using telephones, mobile technology, and computers, patients can respond to questions about how they feel and what they are doing to care for themselves. They report regularly on their social and economic environment, sharing how those factors are impacting their ability to follow physician orders, make appointments, take their medicine, and pay medical bills. Most important, changes in status are measured relative to how the member normally feels, not against an arbitrary standard. For example, members with heart failure will generally report that they are short of breath; it only becomes a concern if they notice the symptom becomes worse than normal.

Members must be educated on the value of these programs and on why the programs offer them the best means to engage in their own self-care. Generally, members respond when they have had a recent care event—an admission or a new diagnosis—that spurs them to action. From there, members are trained to initiate each interaction via phone, web, or mobile devices. The value of patient-initiated interactions is that they help prompt a change in behavior. Patients learn to reconcile how they feel with the measurements they report while they also develop the daily habits of health that the daily interactions support. Programs are personalized based on how the member responds, how frequently they interact with the programs, and how frequently their responses generate alerts. If a patient doesn’t initiate an interaction, the patient is called or texted as a reminder, reinforcing the habit-building aspect of the program.

Surprisingly, programs of this type have higher compliance and persistence rates than other programs that seem easier to implement. For example, alternative approaches such as smartphone apps, while much touted, have been shown to lose their appeal an effectiveness in a relatively short time frame, with some users’ interest fading after only a single use. h By contrast, when members are clearly selected, personally engaged, and trained and educated on the program’s value to their health, they are much more likely to adopt the program and maintain their participation over time.

Clear Benefits

The challenges of implementing this approach are more than offset by its huge potential benefits. Patients with diabetes have costs 2.3 times more than those for patients without diabetes. i However, cutting A1c by 1.5 percent can cut costs by $1,717 a year. j Preventing 30 percent of current pre-diabetics from becoming diabetics could save $74 billion in annual medical costs. For diabetic patients, daily engagement promotes healthy behaviors, like glucose monitoring and weight maintenance, while respecting the member as an individual.

Patient-reported data are powerful beyond the numbers because risks to patients—such as dizziness as a measure of fall-risk, or depression as a measure of general decline—aren’t all easily quantifiable. What matters is when a patient comments on being more forgetful or more dizzy than normal. This personalized interaction allows care managers to tailor care to the patient’s specific needs rather than apply a single narrow, rigid standard to all patients.

Most important for health plans, it creates an environment of scalable mass customization.

Scalable Mass Customization

As important as it is to gather information from members, it is equally important to know what to do with that information. Daily monitoring information can be analyzed and then delivered to care managers in an exception-based workflow. This approach enables care managers to review only data for members who have generated alerts by reporting meaningful changes or troubling trends (i.e., events substantial enough for the member to say, “Today isn’t normal”).

This approach addresses two drawbacks of the traditional care management model.

First, the data are timely, so the care management response also is timely and inherently personalized. By measuring a patient’s responses relative to what the patient calls normal, care managers have essential information that ensures they contact only the members who need help. This timely, personal approach cannot be matched by lab results, clinical measures, or rigid care protocols. For example, if a patient doesn’t come into the office or doesn’t have an appointment, most analytics systems are blind, not because of a data-processing flaw but because of the inherent limitations of clinical and claims data. Data provided in a real-time feed, however, can give care managers visibility into their member population so they can intervene in the right way at the right time.

Second, the workflow allows a single care manager to care for more members without requiring more resources. Member-centric, exception-based daily monitoring is exceedingly scalable. Because a care manager contacts only those members who need help on any given day, there is no wasted effort on phone calls or unwarranted outreach. Furthermore, because only 10 to 15 percent of members have an issue requiring attention each day, the care manager’s time is optimized to meet those members’ needs. The result is that the total member pool assigned to a given care manager can be six or seven times the size of the daily alert group, allowing many more members to be engaged in the program than with a traditional approach. With each care manager costing as much a $100,000 a year in salary, the cost of intervention and monitoring drops dramatically.

By leveraging patient-centric monitoring as a centerpiece of a care management model, achieving the Triple Aim becomes more feasible:

  • The patient experience of care is improved as members are helped to stay healthy, at home, and out of the hospital.
  • The costs of care are reduced as necessary admissions, ED visits, and other intensive services are avoided.
  • Care access and population health are improved as the model enables care navigators to increase the scale of their member engagement efforts and advocacy for members who would otherwise be on their own from the hundreds to the tens of thousands.

Moreover, as suggested previously, such an approach also can be implemented without a huge investment on the part of the health plan.

Providers benefit from this process as well. Daily interaction with health plan members creates a rich stream of data and a sense of connectedness between health plan members and their health care. As this information is shared with providers, it helps the providers see patient interactions not as disconnected events but as parts of an ongoing and interconnected process of caring for patients as they encounter challenges, change habits, improve their self-care, and seek help from care providers to change their healthcare regimens. Connected care is better, cheaper, and more efficient care, and it frees up resources from needing to constantly focus on less complex cases that patients themselves can help under control to be reallocated to address more difficult to resolve healthcare issues.

Health plans are constantly looking for opportunities to improve the economics of care without restricting access. Meanwhile, patients have a great need for convenient ways to be better connected to primary care without increased effort. Changing care management models by engaging patients as active participants in their own care management processes may be the best way to transform the Triple Aim from an elusive concept to an accomplished reality. 

Jim Evans, executive vice president, Pharos Innovations, Des Plaines, Ill.


a. DesJardins, J., “U.S. Healthcare Is a Global Outliner, and Not in a Good Way,” Visual Capitalist, Aug. 17, 2016.

b. Kamal, R., and Cox, C., “How Has U.S. Spending on Healthcare Changed Over Time?” Peterson-Kaiser Health System Tracker, Posted Dec. 19, 2016.

c. Islam, I., “Rising Cost of Drugs: Where Do We Go From Here?” Health Affairs Blog, Aug. 31, 2015.

d. Iuga, A.O., and McGuire, M.J., “Adherence and Health Care Costs, Risk Management and Healthcare Policy,” Feb. 20, 2014.

e. Agency for Healthcare Research and Quality, “Designing and Implementing Medicaid Disease and Care Management Programs, Section 8: The Care Management,” Page last reviewed October 2014.

f. Matthews, M., “Infographic: The ROI of Patient Engagement,” Health Intelligence Network, Sept. 9, 2016.

g. Moore, B., Levit, K. and Elixhauser, A., “Costs for Hospital Stays in the United States, 2012,” Statistical Brief #181, Healthcare Cost and utilization Project, October 2014.

h. Fried, I., “Mobile Apps Have a Short Half Life; Use Falls Sharply After First Six Months,” recode, Sept. 2, 2015.

i. American Diabetes Association, “Economic Costs of Diabetes in the U.S. in 2012,” Scientific Statement, Diabetes Care, April 2013.

j. Freed, S., “The True Costs of Diabetes and Preventing It,” Diabetes in Control, March 2017, 2015.


googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text1' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text2' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text3' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text4' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text5' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text6' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text7' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-leaderboard' ); } );