The shift to value-based care and payment models is well under way, and as the Huron Consulting Group said in a recent report, “While the appropriateness of the rate of change can be debated, health systems can be sure that transformation has started and population health management is the future of healthcare delivery.” There were some big factors speeding up the rate of change over the past year, including the Department of Health and Human Service’s (HHS) announcement in January that CMS will tie 30% of all fee-for-service (FFS) payments to providers through alternative payment models (i.e. ACOs) and bundled payments by 2016, with an increase to 50% by 2018. At the time of the announcement, an estimated 20% of Medicare FFS payments were through new payment models, according to HHS. Besides improving patient care, the program aims to cut healthcare spending. Medicare’s current FFS payment system cost taxpayers $362 billion in 2014, as reported by The Washington Post. This represented the first time Medicare set specific goals for expanding alternative payment systems in the program.
A few months later in March, the Obama administration launched the Health Care Payment Learning and Action Network. As a public-private collaboration designed to speed the transition to value-based payments, it had more than 4,000 healthcare stakeholders and 601 organizations registered to participate as of June.
Through the collaboration, CMS will facilitate joint implementation of new models of payment and care delivery, identify areas of agreement towards alternative payment models, collaborate to generate evidence, and create implementation guides for payers, purchasers, providers, and consumers. Dr. Patrick Conway, CMS chief medical officer, said the network is more of a partnership than a government-mandated program. “We are going to lead and catalyze from the public sector, but the public-private partnership here is critical.”
Private payers in the game
The private sector has been involved with value-based payments for many years. In fact, Blue Cross and Blue Shield companies spent more than $65 billion on value-based care, roughly 20% of all claims, in 2012. The Blue Cross Blue Shield Association’s (BCBSA) annual survey of insurers found the money is being channeled through a “diverse portfolio” of 350 local programs across 49 states covering 24 million members and 215,000 physicians (155,000 primary care doctors). Scott Serota, president and CEO of BCBSA, said the value-based initiatives include changing payment incentives, partnering with clinicians on information sharing, and engaging patients with wellness programs and price transparency.
The value-based contracts saved Blue Cross insurers a collective $500 million in 2012, through reduced ED visits, hospital admissions and readmissions and high-cost, high-risk interventions as well as improving access to preventative care and controlling chronic conditions. In addition, Aetna reported 28% of its reimbursements are now in value-based contracts, and it expects that rate to increase to 75% by 2020.
The report by Huron Consulting Group found in 2014, 85% of leading health systems earned revenue from a fee-for-service (FFS) model and only 15% from value-based or risk-alternative payments. However, the group expected a shift of about 6% from fee-for-service to value-based revenues in 2015. The report anticipated the increased focus on population health to manifest in three key trends:
- Increased organizational commitment via more spending and investments;
- More assumption of risk in the provider market. Providers will accomplish this through commercial incentives, partnerships with health plans (ACOs), and bundling, full or partial capitation; and
- Strong data analytics to gain full benefits from collected data.
The report concluded, “The future of managing risk will be largely dependent on the ability of health systems to collect and synthesize large amounts of data into actionable improvements in care delivery.”
While many would agree value-based care is the wave of the future, an article in Healthcare IT News explains the top five challenges of population health:
- Clinicians need to comply with evidence-based pathways and protocols that outline how doctors and nurses should treat patients;
- There’s too little clinical care coordination for patients despite available tools and technology;
- Providers need to analyze data to pinpoint patient populations that require the highest care costs and then find ways to bring change to those population subsets;
- The potential for improving care is in the ability to aggregate claims data with EHRs and run analytics against those sources; and
- Providers need to better understand how to engage their patients, whether it’s to enforce medication adherence or change lifestyle habits. This is key to better outcomes and cost savings.
Dr. Charles Kennedy, chief population health officer for Aetna’s Healthagen division, told Healthcare IT News, “Let’s give doctors the ability to find those patients who are not coming in, but are ticking time bombs and practice prevention and wellness to avoid expensive disasters.”
Technology is key, but adoption is slow
Although technology plays a key role in population health, a recent HIMSS Analytics survey found a majority of healthcare organizations are moving towards population health without an IT solution. In fact, only 25% of organizations with population health initiatives currently use a vendor provided population health solution. After polling 200 healthcare executives, the respondents indicated IT solutions for population health would be best for analytics, reporting, data warehouse and aggregation, business intelligence, and a patient dashboard or scorecard. Most of the organizations have focused on chronic disease management (83% of respondents with population health initiatives in place) and wellness/preventative health (82%).
Dr. Brent Egan, medical director of the Care Coordination Institute (CCI) in South Carolina, told Becker’s Hospital Review technology is key for population health in the areas of patient risk stratification such as capturing real-time information from multiple sources, supporting ongoing integration of care between providers, and providing a complete view of the population.
A software population health platform company called DatStat, captures patient-reported data and provides health tracking to leading health systems like the Cleveland Clinic, Dana-Farber Cancer Institute, Geisinger, etc. The platform integrates with the client’s EHR, provides real-time analytics and is scalable. Geisinger Health Systems uses DatStat as their primary tool for patient communications and tracking, and it has enabled the organization to scale up from tens of patients per day submitting Patient Reported Outcomes (PROs) to over 3,000 per day, as reported by Forbes.
A 2013 report by the vendor research firm KLAS Enterprises found 78 providers used at least one population health management application, with respondents using products from a total of 23 vendors. It chose 9 leaders based on their services, experience and ability to deliver: Advisory Board, Conifer Health, Explorys, Healthagen, Optum, i2i Systems, McKesson, Phytel, Premier, and Wellcentive. It also named three EHR vendors as emerging players in population management tools – Cerner, Epic and NextGen.
According to the report, “Today, PHM is largely a realm of third-party vendors, but for many providers, a holy grail would be EMR integration, from back-end database to front-end physician workflow.” However, currently, interoperability and data integration remain barriers in population health, according to an eHealth Initiative survey. A total of 65 organizations responded to the survey; those involved in population health initiatives included patient-center medical homes, Medicare/Medicaid ACOs, pay-for-performance programs, commercial ACOs, and bundled payment initiatives. Most of the organizations are using population health to address chronic conditions (65%), readmission risk (60%) and high-cost care cases (59%). However, although analytics are key for measuring quality, many organizations have trouble integrating data. Providers are searching for ways to leverage their data to improve patient care and lower costs.
When technology advances to make data accessible, easily integrated, and interoperable, this will serve to solve one part of the population health management challenge. Healthcare providers will need to quickly adapt to the new value-based payment models and become more accountable for patient health outcomes. But, as Dr. Drew Harris, program director of health policy at the Jefferson School of Population Health, said in a 2013 editorial, “The Population Health revolution is underway. Our opportunity and challenge is harnessing the momentum to build a financially sustainable national health system that promotes health, prevents disease, and improves health outcomes for all Americans.”