Population Health Management: The Next Frontier for Health Care


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By Brad Stephan, RN, BSN, BA

As a nurse, allow me to sum up the traditional medical model driving the health care industry, as follows: We sit and wait for the phone to ring. Of course, the “we” is the health care provider—physicians, nurses, hospitals, etc.—and the person at the other end of that phone is you, a typical patient whose symptoms have progressed to the point of being self-evident or intolerable. In other words, the traditional medical model represents “reactive medicine,” which is so 20th century! And, now, here’s the problem: Our 21st-century budget cannot afford 20th-century medicine, particularly with the added burden of an aging population coupled with a struggling economy. Something (or, more precisely, someone) has got to give.

The 20th-century medical model had three primary characteristics: (1) It was “disease-based,” as we learned how to diagnose and treat disease and trauma (and we did that very well); (2) It was “consumer-based,” as we focused on treating one patient at a time (after they brought their symptoms to our attention) and (3) It was “volume-based,” as health care providers were reimbursed on a fee-for-service basis (so, more disease meant more money).

Let’s contrast that with the 21st-century medical model: (1) It is “health-based,” so we must learn how to prevent, detect, anticipate and mitigate both disease and trauma; (2) It is “population-based,” so we must learn how to provide health-based services on a proactive basis to an entire “covered population” (e.g., Medicare patients, Blue Cross patients, etc) and (3) It is “outcome-based,” as health care providers are rewarded for quality, not volume, so we must learn how to make money by keeping people healthy.

Compensation plays a crucial role in the health care industry, as the type of reimbursement determines the type of incentive. On one end of the reimbursement spectrum is traditional fee-for-service, which only rewards for volume, so the financial incentive is to treat disease and trauma—and lots of it. Next on the spectrum is “Pay for Performance” (P4P), which rewards for quality, as well as for volume, so the incentive is to treat disease and trauma but do it better than the competition in order to receive additional payment. On the other end of the spectrum is “risk-sharing” (or salaried compensation), which rewards for prevention, detection and mitigation of disease. Only risk/salaried reimbursement is entirely health-based, where health care providers achieve their greatest financial rewards when they keep their patients healthy.

The ancient Chinese were experts at aligning the incentives between provider compensation and patient outcome. A physician would receive ongoing payment from their patients in the form of food, services or money for as long as the patient remained healthy. When the patient became sick or injured, all payment would cease, as the patient could no longer grow food, perform services or generate income. However, the ancient Chinese probably took it a little too far. If the patient was a wealthy merchant or powerful warlord and died as the result of their disease or trauma, the physician was beheaded! You have to admit, though, this was certainly a strong incentive to keep patients healthy!

Now, let’s ask ourselves a very important question: What is the root cause of rising health care costs? Is it caused by physician fees? Or hospital charges? Maybe it’s due to insurance company premiums? Or, how about new technology? Well, one thing I am certain of, it’s not the result of nursing wages! OK, here’s my answer: Sick people. (I’ll give you a moment to ponder that one.) So, if sick people are the root cause of rising health care costs, then the best solution, the only solution, is to reduce the incidence and burden of disease (as well as trauma, i.e., falls, motor-vehicle accidents, gunshot wounds, etc.).

Speaking of sick people, I believe I’m fairly safe in making this generalization: Everyone wants to be healthy. But, unfortunately, four obstacles stand in their way: (1) Knowledge, (2) Motivation, (3) Resources and/or (4) Social Support. These obstacles, however, can also be inverted to represent the “Four Attributes of Good Health,” which now become part of the new “job description” for 21st-century medicine. Health care providers must learn how to help their patients turn these obstacles into attributes in order to prevent disease and optimize health. (OK, “genetics” can certainly be considered a major obstacle to good health, but even its influence can be greatly mitigated through appropriate lifestyle choices.)

Staying on this topic of “sick people,” it is easy for health care providers to just throw up their hands and exclaim, “People won’t change!” And, they’d be right most of the time. But that doesn’t mean they should not try. This paradigm shift from a sickness-based health care system to one that is wellness-based will take 50 years—so we’ve got to get started sometime. The reason we must do it is to attack the root cause of rising health care costs, and the reason we should do it is to create the type of health care system we want for our children and our grandchildren.

Population health management (PHM) can be described as a proactive, coordinated and comprehensive approach to health care delivery for a covered patient population, and it is comprised of seven components: Screening, educating, motivating, navigating, monitoring, intervening and reporting. The most challenging, as well as the single-most important key to PHM success, is generating and maintaining patient motivation. A newly created position to help achieve this goal is the “Nurse Coach.” But health care providers cannot control the lifestyle choices of their patients on a 24/7/365 basis, so they must find effective and efficient ways to help patients control themselves. They must help patients develop the capacity for both Self-Efficacy (“I can make a positive impact on my level of health and well-being!”) and Self-Discipline (“I can implement and maintain the lifestyle regimen my Nurse Coach has prescribed for me!”). Indeed, if we are truly serious, health-behavior modification requires the social support of all society, e.g., mandatory vaccinations for school children, banning smoking in public places, nutritional labeling on food and menus, mandatory seatbelt and helmet use and so on.

This aphorism from ancient India shows how their physicians tackled this great challenge of health-behavior modification: A mediocre physician will simply prescribe a medication. A good physician will both prescribe and dispense a medication. But, a great physician will prescribe and dispense a medication, as well as jam it down the patient’s throat!

PHM requires a new paradigm in all aspects of our health care delivery strategy: Prevention versus intervention; presymptomatic versus post-symptomatic; multidisciplinary teams versus individual physicians and outreach programs versus intake facilities. The outreach program represents a second key requirement to PHM success—health care providers must go to patients rather than relying on patients to come to them. Health care providers can no longer sit and wait for the phone to ring. They must reach out to their covered population in a manner that is comprehensive, targeted and cost-effective.

To implement this proactive strategy, a new organizational entity, the “Outreach Program,” must become an integral component of 21st-century health care infrastructure. Outreach Programs may be owned and operated by health care providers, insurance companies, governmental entities, self-insured employers or free-standing vendors, and will have three basic elements in common: (1) A dedicated staff, (2) A defined patient population and (3) A funding source.

The dedicated staff includes nurses, dieticians, social workers, fitness trainers and pharmacists, among others. The defined population will include all patients covered under a risk-sharing arrangement, such as members covered under a particular insurance company or beneficiaries covered under Medicare or employees covered under their employer’s self-insured health plan. And the funding source may be built into the risk-sharing arrangement or paid separately on a per-member-per-month basis.

Also essential to the success of a PHM Outreach Program is its Health Information Technology (HIT) system, along with its ability to electronically access all medical record and insurance billing data on a real-time basis. This information is used by the Outreach Program staff to develop and maintain a comprehensive, ongoing health-status biography for each and every member. Predictive modeling software is then applied to help identify high-risk, high-cost patients with modifiable medical conditions in order to target resources in the most timely and cost-effective manner.

The Outreach Program’s service menu should include health coaching, behavior modification, home-based telemonitoring, patient navigation, social support programs, informational workshops and health fairs. Services are delivered on an individual or group basis via face-to-face sessions, telephone or the Internet (e.g., email, texting, Skype, telemedicine, etc.). Service settings include the member’s home, the Outreach Program’s learning laboratory, an employer’s conference room, a skilled nursing facility or a local hospital, among others.

Members are provided with an individualized and regularly updated “Healthy Living Prescription,” which includes disease, lifestyle, clinical, pharmaceutical and physician-generated information that is delivered in a multimedia format designed to help patients manage their particular medical condition(s), as well as improve their overall level of health. Members are also encouraged to complete a daily, Internet-based “Self-Tracking Log,” which documents their personal compliance with their Healthy Living Prescription.

To help address the challenge of health-behavior modification, Nurse Coaches will be trained in utilizing the latest, most effective techniques and resources, such as Motivational Interviewing, Shared Decision-Making, Informational Therapy and Ottawa Personal Decision Guides. Patients will be offered the opportunity to serve on various “Client Advisory Committees” and participate in a “Health Buddy” program, where they volunteer to be a telephone buddy to another patient with a similar medical condition or health-improvement goal.

Patients will also be offered the opportunity to sign an annual “Health Improvement Contract,” under which they agree to “try their best” to comply with their Healthy Living Prescription, with various rewards and recognitions based on performance. Additionally, to inject a degree of competitive zeal into the health-improvement process, patients will be ranked against their peers within various demographic- and disease-adjusted groupings on such comparative health care measures as blood pressure, body mass index, cholesterol level, etc., and such resource-consumption measures as medication cost, emergency room visits, hospital expenditures, etc.

Based on figures from Blue Cross Blue Shield of Maryland, a typical patient population has 30 percent of patients accounting for 85 percent of costs, which underscores the dual goals of PHM: (1) Mitigate the burden of disease on the 30 percent and (2) Prevent the 70 percent from becoming part of the 30 percent. Toward this end, an Outreach Program’s mission statement might read: The mission of HealthCheck, Inc. is to actively engage, educate and encourage our covered population through a continuous, aggressive and unrelenting delivery of health improvement services.

The Affordable Care Act of 2010 (famously known as “Obamacare”) goes a long way toward encouraging the development of both PHM and Outreach Programs through the creation of the Accountable Care Organization (ACO), along with federal recognition of a relatively new concept called the “Patient-Centered Medical Home” (PCMH).

An ACO can be defined as a group of health care providers who agree to provide medical care and share clinical and financial accountability for a defined patient population. Under Medicare rules, the ACO requires a formal legal structure, a minimum of 5,000 Medicare members and a three-year commitment. It must have an appropriate HIT system and demonstrate coordinated, patient-centered care based on evidence-based protocols. The Outreach Program may be an internal component of an ACO’s infrastructure or may be a third-party vendor providing services to the ACO on a contractual basis.

The purpose of the PCMH is to ensure that each patient has a strong, ongoing relationship with a Primary Care Provider (PCP), which might be a physician or a nurse practitioner who assumes responsibility for providing or coordinating all health care services for his or her covered membership. The PCMH should be the first point of contact for all patients and provide continuous, comprehensive and coordinated care focused on improving health, encouraging self-management and teaching health literacy.

The PCP also assumes responsibility for arranging and managing referral services when care by a specialist (e.g., general surgeon, cardiologist, gastroenterologist, etc.) is needed. The PCMH contracts with the ACO for administrative, marketing and financial services and works closely with the Outreach Program staff in improving the health and well-being of its patient population.

Clearly, Population Health Management holds great promise for enhancing our nation’s level of health, happiness and productivity, while moderating the escalating price tag for delivering and accessing medical care services. For health care providers, it offers a vast, uncharted landscape for the development and provision of new skill sets that will play a crucial role in transforming the health care industry from a 20th-century model based on sickness, consumer passivity and provider dominance, and toward a 21st-century model based on prevention, wellness and personal responsibility.


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