Population Health Management Necessarily Leads with a Loss

"We are looking at the long-term, so when we talk about moving the organization toward value-based contracts that's just one part of our strategy," he notes.

The new push will be led by Michael Murphy, who last week was named president and CEO of Iowa Health's ACOs. Murphy is set to begin his job mid-May; he's currently executive vice president of health networks for Trinity Health System based in Novi, Mich."The key to that innovation is the physician," Murphy says in a statement. Murphy led the development of the ACO program across the 35-hospital Trinity Health System and spoke recently at a HealthLeaders Media webcast on physician-hospital alignment and compliance. "By putting the physician at the center of the patient care model, physician leaders can foster a collaborative environment," he notes.

While structuring a collaborative care model to improve the health of the chronically ill has many clinical challenges, establishing a solid financial foundation to support the population health model is equally complex.

"The biggest challenge everyone has now, and it continues to be one of ours, is how do we live in these two worlds until we move enough of the business to a place where we can get rewarded for creating value?," Vermeer says. "There are certainly a lot of pieces that have to be in place to help mitigate the fact that we expect revenues are going to decline once we're doing [care] the way it needs to be done [under value-driven healthcare]."