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3 Major Trends Forging Healthcare’s New Reality

By Paul Black  
   November 01, 2017

High costs and inconsistent quality have plagued healthcare for too long. Three trends – systemic, economic and transformative – are influencing the industry’s move toward more proactive community based, coordinated population health management.

Healthcare is an ever-changing industry, and a new reality is emerging. It requires providers to become more proactive to achieve better clinical and financial outcomes and to become more efficient in driving down costs. Organizations will need a strategic approach and an operational focus for population health management to address three trends shaping our collective future:

  1. Systemic – More chronic conditions and complex care

    A recent RAND study estimates that three out of five Americans have a chronic condition; two out of five Americans have multiple chronic conditions. These high-risk, high-cost patients frequently see multiple providers. Unfortunately, these patients do not often get the coordinated response they need from a fragmented continuum of care.

  2. Economic – More value-based reimbursement models

    The United States spent $3.2 trillion on healthcare in 2015, and it is the single largest expense of the federal budget. Efforts to curb these rising costs include introducing value-based, at-risk financial models to replace fee-for-service payments.

    For example, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) went into effect Jan. 1, 2017, and reforms payments for healthcare services for 55 million Medicare patients. The associated Quality Payment Program (QPP) is the regulation that will shift the reimbursement model from volume-based payments to a more comprehensive value-based framework.

  3. Transformative – More alternative care settings

    For better clinical and financial results, patients need the right care in the right place at the right time. New outpatient care settings – such as day surgery clinics, urgent care centers and even patients’ homes – may offer better options than traditional acute care facilities.

    These trends represent a significant cultural and organizational shift. Providers must create focus on the consumer, and deliver more individually coordinated, community based patient care. These concepts are not new, and neither is the solution: a proactive and coordinated community population health management strategy.

Focusing on high-risk and rising-risk patient populations

Providers need to create care teams to manage patients with chronic disease across the continuum. The highest risk patients comprise only 5% of the population and almost half of the nation’s healthcare costs. It seems logical to focus care management efforts here first.

But Advisory Board researchers predict that focusing on only high-risk patients will net the organization a negative 3-4% margin in five years. Costs for this group decrease, but the unmanaged rising-risk patients will get worse and threaten financial stability.

Advisory Board researchers also modeled an approach where the health system managed care for rising-risk patients, which comprise 20% of the population. Without intervention, these people will become high-risk patients.

Focusing care management strategies here can reduce the number of people converting from rising-risk to high-risk from 18% to 12%. This significantly improves the financial picture, netting the organization a positive 3-4% margin in five years.

Now is the time to act

Uncertainty around national health policy has caused some providers to hesitate. Unfortunately, waiting to move forward with a population health platform and strategy could increase financial and competitive risks. For example, even with all of the political debate and disagreement over healthcare’s future, it is clear the government will continue its march toward value-based care payment reforms.

Consumers have shown an increasing appetite for quality and control over their own healthcare. This explosion of data must come together in a single, united view of the patient. It requires a strong foundation of integrated IT solutions that enable an open, connected community of health.

A new white paper explores four core capabilities that population health solutions must have to deliver excellent value to healthcare organizations. To learn more, download Enabling Proactive Health Management.

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