Saving with Population Health Management

An old adage says the best time to plant a tree is on a warm, sunny day 20 years ago.

“The second-best time is today, or in our case, four years ago,” says John Hammond, director of human resources at Jewish Hospital & St. Mary’s HealthCare in Louisville, KY. That’s when Jewish decided to offer its 5,000 employees an option to enroll in its population health management program.

Since then, the hospital’s $30 million annual expenditure on healthcare has improved each year compared to the hospital’s peers. “Our cost should be about $35 million to $36 million based on national averages,” Hammond says. Or put another way, Jewish saves about $100 per member per month over comparable employers. Hammond is convinced that the program, managed by Gordian Health Solutions Inc., of Nashville, is one of the main reasons why Jewish, which is self-insured, pays less to cover the healthcare of the roughly 10,000 people it insures, including dependents.

Population health management differs only slightly from disease management in execution but drastically in terms of the people on whom it focuses. In traditional disease management, a team of workers helps monitor the health of and “coach” the 20 percent of individuals whose health problems make up 80 percent of the healthcare costs of an employer. This approach, however, leaves that other 80 percent of the population to fend for themselves. Population health management’s goal is to identify those in the 80 percent low-cost population who are at varying risks of moving into high-claims territory.

Gordian is a name most Jewish employees wouldn’t recognize. The program is marketed to them internally as Healthy Choices, and high-risk employees are placed into a variety of interventional programs—for exercise, weight loss, smoking cessation, cholesterol, stress relief, osteoporosis, high blood pressure—based on results of a health risk assessment.

Chief Financial and Administrative Officer Mark Carter is also convinced. What was his first question when evaluating the merits of the program?

“How much does it cost and what’s the ROI?” he laughs. While he supports the broad goal of helping employees be healthier, Carter says what sold him on the program—besides ROI—were the incentives for participation. Healthy Choices offers a $15 payment and a $35 reduction in the employee’s share of his or her monthly premium costs in return for participation in the program.

Healthy Choices has a 60 percent participation rate and a 75 percent annual re-enrollment rate over the four years it’s been in effect, Hammond says. If the employee fails to return calls from his health coach, “they take the money off the next month, and believe me, people notice and complain when that goes away.”

—Philip Betbeze