Seeking ROI Via Population Health Management

This article appears in the June 2012 issue of HealthLeaders magazine.

When it comes to population health management, prevention may be the financial cure for skyrocketing healthcare costs. PHM is more than an all-encompassing term for prevention, wellness, and chronic care; it's at the core of healthcare reform and it offers hospitals and health systems a pathway to long-term patient care cost reductions. However, aside from a willing participatory patient population, a successful PHM program needs three elements: collaboration, communication, and data.

Improving the quality of care patients receive, most notably for chronic care patients, is the rationale for establishing PHM programs; but of no less interest to healthcare leaders is the need to see patient care costs decline. With the passage of the Patient Protection and Affordable Care Act, health plan medical loss ratio calculations were revised, placing a higher value on wellness and care coordination services. PPACA simultaneously provided a benefit package for health insurance exchanges that includes prevention, wellness, and chronic care services. Although HIXs aren't set to start until 2014, the Centers for Medicare & Medicaid Services  is expected this year to define structures and an essential benefits package that all plans must offer. CMS officials have indicated that there will be a focus on population health management services.

QualChoice was started in 1994 as a third-party administrator by the University of Arkansas for Medical Sciences and has expanded into provider networks, administering corporate benefits, and healthcare insurance and other ancillary coverage markets.

The payer's initial P4P program morphed into PHM, says Armstrong, when it began looking at both quality and efficiency measures and establishing targets for physicians treating specific patient populations within the plan, such as diabetics. Provider payments are based on practice results that are scored against the predetermined metrics. Each segment being tracked is scored and totaled against a larger dollar target for the provider organization. Any savings shown in the comparison are then shared evenly between the practice and the payer.

Armstrong says QualChoice had 11,420 members representing family practices, internal medicine, and pediatrics participate and saw an average total reduction in cost of $16 per member per month year over year, from $226 to $210 averaged across those three practice types—representing about 8% of the total average spent.

"We are focusing on the quality of care, and the metrics help show how we're also bringing value," explains Robert Hopkins, Jr., MD, FACP, FAAP, professor of internal medicine and pediatrics at the University of Arkansas for Medical Sciences. The university has been working with QualChoice to improve the community's overall health through PHM.

Accurate and current data is essential from participants of a PHM program, explains John J. Walker, MD, CPE, chief medical officer at Cornerstone Health Care, a physician-owned primary care and specialty group practice based in High Point, N.C. The ability to aggregate data between the payer and the provider helps drive better treatment and results. Moreover, the payer must accurately identify the population in order to manage by acuity as well as understand the true cost of care for these individuals to the overall system. However, data-sharing can be an obstacle for PHM especially with so many IT systems in use across the healthcare industry, and typically some type of shared technology or system upgrade is needed, as Walker can attest.

In 2003 Walker joined Cornerstone, a $190 million multidisciplinary group practice with 73 locations, to lead the organization's medical home initiative. He became chief medical officer in 2010. Shortly after Walker started, Cornerstone Health Care's CEO Grace E. Terrell, MD, adopted the Humedica MinedShare platform as the tool that would put the organization's data to use targeting high-risk diabetic patients for its burgeoning medical home.

The platform took the organization's clinical, operational, and financial data and created benchmarks and comparative analytics. These reports provided its physicians with a guideline to compare their performance against their peers within a targeted population. Further, Walker says the data comparisons opened up a dialogue among physicians and helped motivate physicians to improve by encouraging better collaboration and a sharing of best practices. 

The same data was used to guide a four-person patient care advocate team that Cornerstone began to ensure the success of its patient-centered medical home. Using the population-specific data, patient care advocates make calls to chronic care patients. In the first year, the team made 5,528 calls to high-risk patients, verifying whether patients were taking prescribed medications or following any other physician-ordered care. The advocate could address basic medical questions based on the electronic medical record and schedule appropriate follow-up care. The program resulted in 1,816 appointments—1,616 of which were kept.

"With population health it's important to know you can't do robocalls or email blasts," Walker says, noting that  to manage a high-risk population, patients need contact with an advocate who has access to their medical data and the ability to discuss what's happening with them clinically. The advocates can identify gaps in care, encourage patients to keep scheduled appointments, and schedule follow-up visits when warranted.

While Cornerstone's medical home is still in its infancy, the results are promising; between 2010 and 2011, the organization saw a 16.5% decrease in diabetic patients with A1C greater than 9, LDL greater than130, or BP greater than 140/90. Walker says the organization attributes the improvement in these patients' health to the combination of efforts by the physician to work with the patients to educate them more about their disease and necessary treatment, and to the patient advocate outreach program.

Plus, he says, until the healthcare system makes the full shift from fee-for-service to fee-for-value, Cornerstone's approach to population health is turning a profit in the current reimbursement environment. Walker says the advocate program, based on a financial analysis of office visits and ancillary income associated with those visits, returned $216 per kept appointment. And while Walker would not say how much the platform cost, he did note that even including the cost of the software, the medical home "would still be profitable in 2011."

Walker says the group is now talking with payers about how the advocate program and medical home can be applied to shared savings programs.

While Cornerstone launched its medical home program in tandem with a new platform, programs such as QualChoice's took longer to arrive at that conclusion. At the beginning of its PHM program, QualChoice tracked patient populations manually and provided monthly progress reports (with month-old data) to providers. While the manual process worked, Armstrong says it wasn't the best approach for catching patient problems in the early stages.

Ultimately this year to help it aggregate data for comparison and improve care-related communications between the payers and providers, QualChoice installed an integrated healthcare management system from TriZetto called Clinical CareAdvance 4.7.

"We wanted to look at those patients who are in the ambulatory [setting] all the time and understand how they become part of the ambulatory metrics," says Hopkins. "We also want to focus on those with diabetes, and to follow the patients with high blood pressure to make sure that these patients aren't developing worse problems. You need to look at all the data."

QualChoice's new platform will automate the process of managing members' chronic illnesses as well as the continuum of care including case, disease, and utilization management, and allow it to use clinical resources more effectively, explains Armstrong.

"As we pioneer our program, we have to help the practices get accurate, on-time information about the patients," says Armstrong. "Real-time information about the high-risk members can help the organization spot the gaps in care and improve collaboration," he notes.

This article appears in the June 2012 issue of HealthLeaders magazine.

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