As the U.S. healthcare system moves toward value-based care, population health strategies are being considered as ways to reduce overall costs of care.
But success for health systems will require a recognition on their part that a gap exists between population health and current care management. And in the efforts taken to narrow that divide.
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In an Advisory Board study, experts analyzed a modeled capitated Medicare contract in which 5 percent of patients were high-risk, 20 percent were rising-risk, and the other 75 percent were moderate- to low-risk. The study calculated that if no care management were used on these patients, the organization would suffer a negative 8 percent margin.
Losses that large won’t slip by unnoticed.
Solid care management — particularly for the highest-risk patients — helps mitigate some of that profit-loss equation. According to the Advisory Board model, hiring a care management team to focus on the top 5 percent of the panel will slightly improve the margin, but the organization will still be in the red with a negative 3 to 4 percent margin. It makes sense that most groups focus their initial care management efforts on the high-risk patients because it’s the most concentrated group of high-cost individuals. However, there’s still a gap until you start seeing a positive financial return.
You’ll only see a positive ROI when you consider the rising-risk population, as well as the highest 5 percent. After all, nearly a fifth of those patients will eventually move into the high-risk category, raising costs over the course of the contract. This logic applies across the industry, from risk-bearing physician groups and health systems to self-insured employers who rely on care management from third-party administrators.
Working to bridge the gap between population health and care management helps reduce the rate of rising-risk patients graduating into the high-risk category, improving population health and helping you realize positive margins more consistently.
Minding the gap
The goal of any population health tool is to classify a patient panel into risk stratification categories. To classify patients appropriately, population health algorithms consider demographics, claims data, and pharmaceutical data, when available.
These risk categories, which often mimic the Advisory Board’s pattern mentioned above, help determine proper levels of care management and intervention to improve outcomes and reduce costs.
But population health tools all share a significant vulnerability: They lack real-time insight into your patients’ current status. Risk stratification algorithms are inherently reactive because they rely on data such as past medical claims. That places the burden on care managers to track and monitor patients to effectively mitigate population health risk. And care managers are generally experienced nurses, so they’re not cheap. In most cases, they’re not creating billable hours, either, so efficiency is paramount.
However, in alignment with the quadruple aim of optimizing healthcare, the care manager’s workload and satisfaction must be taken into account. It’s unreasonable and financially unsustainable to continue increasing the patients-per-manager ratio without providing managers the tools to be both efficient and effective.
For example, one of the most frustrating aspects of care management is cold-calling patients to collect biometrics or signs and symptoms for their specific conditions. Most of the time, care managers will hit patients’ voicemails, and when patients do pick up the phone, they often feel like the call is disrupting their current routine.
Then, there are high- and rising-risk patients under commercial contracts. While care managers are trying to get in touch with them, these patients are often busy at work and unavailable to discuss their conditions.
The key to bridging the gap, then, is optimizing care managers’ time while making remote communication with patients easier. That way, providers can access real-time data about high- and rising-risk patients and enact treatment immediately to prevent increased health risks among their patient populations.
Creating risk-care matrimony
Bridging this gap requires a strategy that treats population health risk tools and care management as complementary. Here’s how to begin:
- Invest in tools and management.
If you haven’t already, the first step is to invest in a risk stratification tool and begin to build a centralized care management team. As more dollars become at-risk and based on performance, a care manager’s role and importance will continue to expand.
- Expand your focus to rising-risk patients.
Next, focus on expanding your care management efforts to include rising-risk and high-risk patients — the top 25 percent of your panel. Including patients who are rising-risk makes your strategy more proactive than reactive, and as the Advisory Board’s study pointed out, it’s this strategy that creates a positive margin.
- Invest in remote patient monitoring.
Invest in and utilize a remote patient monitoring solution to automate repetitive care management tasks. This is especially useful for expanding your focus to the rising-risk population. The real-time monitoring insight enables care managers to operate at the top of their respective licenses and make the most significant impact instead of wasting time cold-calling patients.
As healthcare economics becomes increasingly results-based, population health and care management are becoming more integral to success. It’s never too early to start planning for that success by bridging the gap with the right population health tools and care management team.
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