Population Health Management Pays for Itself in Four Years

Population Health Management Pays for Itself in Four YearsA relatively new approach to healthcare – population health management (PHM) – already seems to be proving itself to be a powerful tool for executives and managers at care providers. According to a survey by accounting and advisory firm KPMG, more than half the managers surveyed said that their organizations would recoup the money they had invested in PHM within three to four years, according to a press release about the study.

PHM has been a somewhat slippery term, as the definition has been forming over time and the mission is broad. According to Mathematica Policy Research:

PHM programs are a set of interventions designed to maintain and improve people’s health across the full continuum of care – from low-risk, healthy individuals to high-risk individuals with one or more chronic conditions. PHM has elements in common with disease management, preventive services, and health promotion, but differs in both the scope of services and definition of target populations.

The target populations are typically insured groups, although one could be defined as broadly as all U.S. citizens. There are two key points. One is that plans are centered on and tailored to individuals. Each receives evaluation for degree of health risk. People receive such things as wellness programs, risk management, care coordination and disease management based on the risk.

The other key point is there is a loop between healthcare interventions and assessment. As interventions help improve the individual’s risks, assessment again happens, with a change in risk assignment triggering a different set of available interventions.

Care management is automated as much as possible and the goal is to improve individuals’ risks at the lowest possible cost. To manage risk assessment and service delivery, organizations must collect data and work with the target populations, care provision partners and payers.

According to KPMG, 20 percent of the providers taking the survey thought that their investments in healthcare information technology and data tools would pay off within two years. Thirty-six percent said the payoff would take three to four years. Another 29 percent expected a payoff taking five years, while 14 percent didn’t think they would ever recoup the investment.

The biggest help, according to 36 percent of respondents, is expected to come from preventative care, so that disease and other conditions don’t develop as they otherwise might, reducing future costs by early treatment or wellness programs. Twenty-three percent said that evidenced-based clinical protocols would help improve care efficiency and be the reason for cost savings.

However, take the results with a grain of salt. Only 24 percent of the respondents said that their PHM program was “mature;” 38 percent said they were still in the “elementary stages;” and 23 percent described them as in “infancy.” Although managers are expecting great things from the concept, it will still be some time before the numbers show whether they were optimistic or realistic.

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