The coming years will bring a trifecta of new challenges to healthcare: rising costs, complex reimbursement models (courtesy of the ACA and HITECH acts), and an aging patient population.
According to the Centers for Medicare and Medicaid Services (CMS), U.S. healthcare spending hit $2.9 trillion in 2013, accounting for almost 18 percent of gross domestic product (GDP). For the period 2015-2023, CMS predicts spending will continue to rise by about six percent annually, owing to ACA implementation and an aging population that requires advanced care.
Many healthcare organizations (HCOs) — both private and public — are already launching high-level initiatives to lower costs, manage risk, and maintain care quality. One initiative that’s been drawing a lot of interest from HCOs and IT vendors lately is population health management.
What is Population Health Management?
Population health management is part of the larger shift toward “accountable care,” which institutes value-based payments driven by actual health outcomes, instead of the traditional fee-for-service model. At the moment, full adoption of accountable care is mostly limited to integrated delivery networks like Kaiser Permanente and Intermountain Healthcare, but many analysts foresee a future where accountable care is the dominant reimbursement model for the entire industry.
This stronger focus on health outcomes will require providers to streamline their care processes, better target their patient engagement efforts, and use empirical tools to prove results. Having the ability to analyze health data across the continuum of care is a vital first step in achieving these objectives.
That’s where population health management (PHM) comes in. PHM is a strategy aimed at reducing cost and improving quality through data-driven care at the population level. Using PHM techniques, providers and payers look at broader patterns in the population and segment patients by common attributes to identify high-risk patients or high utilizers (i.e patients that cost the most).
Population Health Management Software
“PHM Software” is a bit of a misnomer, since most solutions are still part of a larger EHR suite or business intelligence platform. Term is useful as an entry point for early buyers, or — if nothing else — to classify PHM as something that cannot be accomplished without the right technology. Leading healthcare research firm, KLAS, divides PHM software functions into four distinct areas:
- Data aggregation: gather patient data from multiple systems and providers
- Risk stratification: divide patients into subpopulations and target high-risk, or high-utilizing groups
- Care coordination: allocate care resources to produce the best care outcomes for these groups
- Patient outreach: educate and engage high-risk patients to improve self-administered/preventative care
Population health management is still a nascent discipline. But as the healthcare industry moves toward higher standards for reimbursement and care models centered on patient outcomes, organizations may find themselves facing an evolutionary decision — adapt or perish. Start using data analytics to cut costs and close care gaps, or risk being overwhelmed by a suddenly expensive, chronically-ill patient population.
Aleksandr Peterson is a technology analyst
He covers marketing automation,
CRMs, project management, and other emerging
Last Updated on August 26, 2015