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Intelligence Report: Toward Population Health

Michael Zeis, for HealthLeaders Media, October 14, 2013

What Nash is talking about has consequences beyond building better relationships along the care continuum; the implications are that acute care facilities may have reached their limits of growth. "It's all about care outside the four walls of the hospital. We're talking about no new buildings, no new towers, no new cath labs," he says.

According to report advisor Earl P. Steinberg, MD, MPP, CEO of xG Health Solutions and executive vice president of innovation and dissemination for Geisinger Health System of Danville, Pa., a not-for-profit rural healthcare provider with 1,363 licensed beds in six hospital campuses, the key question is, "How do you deal with the fact that reduced utilization is going to hurt you in your financials?"

Examination of costs

Overall, 29% of respondents identify payer risk or cost sharing as the vehicle most likely to provide a financial incentive to pursue population health management, the top-mentioned item.

Along with the risk-sharing aspects of population health comes the requirement to extend the examination of costs beyond internal costs. Says report advisor Marion McGowan, RN, executive vice president and chief population health officer for Lancaster General Health, a 631 licensed–bed not-for-profit health system serving Lancaster County, Pa., "In the past, we only knew what it cost for patients in places that we owned and operated. If a patient were to go to a skilled care facility for care after a knee replacement, we didn't understand what that cost was, even though we were referring them there."

Obtaining an understanding of costs (and provider productivity and clinical outcomes) incurred by partners and others in the care continuum assumes a level of data interoperability that few have in place today.

Recasting your market potential

Health systems facing reduced utilization may pursue additional admissions to try to solve the problem. The drive to maximize admissions is hardly a new activity, but when considering population health management, one must examine the competitive landscape with an eye toward potential partners and potential competitors.

"You have to have the ability to attract patients to fill those beds," says Steinberg. When they can, some organizations can backfill to compensate for attrition with patients needing higher-value, higher-margin services. But the task in the future will be more involved than a conventional review of services and service lines because it will be important to anticipate how newrelationships might change the competitive landscape in postreform markets.

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1 comments on "Intelligence Report: Toward Population Health"


bob sigmond (10/14/2013 at 11:19 AM)
The best and easiest way for hospitals and health systems to embrace the new model of population health is to collaborate with a Blue Cross plan or other insurer which already understands population heath. Together the two organizations can design a strategic plan for transitioning to population health and agree on an annual provider budget that carries out that strategic plan. This will work best if the hospital turns over its entire billing and collection function [and collection staff which remains at the provider site] to the collaborating third party payer organization which takes over all collections and pays the hospital/health system a single monthly check that covers all the provider organization's expenditures. This avoids the provider organization having to duplicate all the initial preparatory work that the third party payer organization has gone through in becoming expert in population health. With no more involvement with fee-for-service and collections, with no more uncompensated care, and with no more worry about the bottom line, the collaborating provider organization can concentrate on incrementally transitioning into population health, with its collaborating third party payer organization, with goals of increasing quality and access while reducing expenditures. Clearly, many details have to be worked out, including [a] the method for making adjustments whenever the expenditure budget estimates turn out to be too low, [b] how to divide up any net gains or losses at the end of the year, etc. But with trust between the two collaborating organizations, the transition to population health will be remarkably easy and effective. For more information about this approach, call me at 215-561-5730 or e-mail. Right on! Bob