Population Health Management Becomes a Key to Profits

Population Health Management Becomes a Key to ProfitsIn any type of business or organization, uncovering the right metrics and strategic focus can make the difference between effectiveness and failure. That’s just as true for healthcare providers as it is for a coffee store chain, construction company, or global insurance firm.

But finding the make-or-break measures can be difficult. Previous experience and habit can lock executives and managers into an approach that may be adequate but still miss the promise of what could be possible.

For example, healthcare providers historically looked at addressing illness of individual patients. Eventually they began to consider wellness of individuals in an attempt to prevent or manage problems rather than trying to cure them or deal with the roller coaster of incident and response.

The latest approach has become population health management, or PHM. The concept is an attempt to improve care and lower costs by looking at patients as members of populations as well as individuals. When you only look at individual cases and histories, it is easier to miss the environmental, social, and cultural factors that can predispose individuals to particular issues or problems. Partners HealthCare in Massachusetts has actually changed the way it looks at compensation:

Partners HealthCare has shifted away from fee-for-service payments and entered into alternative payment systems where providers agree to a total medical expense (TME) spending target for an assigned population of patients. If spending remains below target, we are rewarded with “shared savings” payments. If we exceed the target we are penalized. We are also measured on our performance on quality and patient experience.

But it would be a mistake to assume that the population approach means losing the individual. Prevention is critical, as it becomes one of the surer ways to constrain costs and improve outcomes.

At a recent conference panel discussion, a number of New York care providers found the opposite was true. They had to focus on data sharing across their networks and working with other providers so actively anticipating health problems and improving responsiveness became easier. For example, one important activity was to identify the patient profiles most likely in their service area to be candidates for hospital re-admittance. The organizations had to manage risk differently than previously, because poor operations and health management could actually cause bigger financial shortcomings.

However, the good news by those at the conference is that the approach does work. More than half of the healthcare managers surveyed said that they expected to recoup PHM investments within three years.

Are you interested in finding a rewarding and lucrative healthcare career that fits your individual strengths and interests? Find out how education can help you adapt to the changing healthcare landscape. American Sentinel University is an innovative, accredited provider of healthcare management degrees, including an MBA Healthcare and Master of Science Business Intelligence and Analytics.