Health system executives have quite a mountain to climb. They must spearhead significant change if their organizations are to survive in today's market. These executives know that one important area of focus is accountable care. But knowing where to start with accountable care can be difficult.
Accountable care essentially boils down to two things:
- Managing fixed-price contracts for the treatment and management of individual patient health
- Applying, to large populations of patients, the patient-specific concept of balancing cost of care with quality of care
The majority of this article will focus on the second aspect, presenting 12 criteria for implementing population health management. But first, I want to briefly address the topic of using technology to manage fixed-price contracts.
The importance of activity-based costing
In the near future, effective management of fixed-price contracts will require activity-based costing. Historically, the economics of healthcare haven't required organizations to understand their costs at a granular level. However, successful participation in risk-based contracts (particularly in per-case or per-capita reimbursement models) requires precision. If you can pinpoint the true cost of care, you can refine your contracts. Organizations that lack detailed cost accounting data have to pad capitated reimbursement contracts to mitigate risk. A granular understanding of costs enables you to cut out some of that padding — and therefore win contracts your competitors can't.
Technology vendors need to step up and provide these tools.
The reality of population health management
Equally important to accountable care is PHM, a topic that is much talked about lately. Although the importance of PHM cannot be overstated, the ability of health IT vendors to enable it is often exaggerated. Vendors claim they offer complete PHM solutions — but the truth, as KLAS pointed out in a recent report on the subject, is that PHM is in its early stages of maturity.
To help executives navigate the hype, I've developed 12 sequential criteria that can be used to guide PHM strategy and evaluate vendor products. My knowledge of the topic dates back to my years working in and running health IT departments for some of the nation's largest provider organizations. The criteria that I've listed first are foundational. Every subsequent criterion can function no better than the design and functionality of those preceding it.
Criteria #1: Precise patient registries
Building accurate population registries is the foundation of population health management. Without precisely defined populations, everything else in the PHM strategy suffers.
Traditionally, population cohorts have been defined using billing data. This practice misses 30 to 40 percent of the patients that should be included in the population. In a fixed-price contracting model, that level of inaccuracy would be financially devastating to an ACO. In addition to billing codes, registries must take into account data such as lab results, functional status measurements, diagnostic imaging results, medications, claims data and procedure codes.
Criteria #2: Patient-provider attribution
One of the most complicated aspects of PHM (and accountable care) is determining who constitutes the patient's care team and what their relative involvement is in the patient's care. The generally accepted high-level options for assigning attribution are:
- Patient selection of physician during open enrollment
- "Most frequently visited" physician over the past two years
- Random assignment of patients to primary care physicians in the same geographic area
- Random assignment of patients in an employer group to primary care physicians in the PPO or HMO
Criteria #3: Precise numerators in the patient registries
Identifying patients that will be particularly difficult to manage is a challenge. Reasons a patient may be unable to fully comply with clinical protocols include:
- Cognitive, physical, economic or geographic inability to participate in a care protocol
- Language barriers
- Willing and informed refusal to participate (e.g., religious reasons)
- Medication contraindications
- Mortality (it can be surprisingly difficult to identify these patients)
An effective population management system must have a method for flagging patients in these categories. Then, care management processes must be tailored to accommodate these types of patients and the physician's level of accountability for their care adjusted.
Criteria #4: Clinical and cost metrics
The next logical step in developing a system for PHM is to measure the practice of medicine against protocols and to continue to measure variability in care. This requires organizations to build dashboards not only around specific patients but around populations of patients. Importantly, measurement should not just focus exclusively on clinical quality — it must also track the total cost of care both for specific patients and on a per-capita basis across the population.
Criteria #5: Basic clinical practice guidelines
An effective PHM system defines how it will manage each population cohort. ACOs need to establish a "Clinical Practice Guidelines" governance body responsible for selecting their source(s) and processes for implementing and maintaining clinical protocols.
Start by defining clinical practice guidelines for the patient cohorts and clinical process families that offer the highest opportunity for improvement and cost savings. The simple formula for identifying those areas of opportunity is:
(Number of Patients in the Population) x (The Average Total Medical Expenditure per Capita)
Criteria #6: Risk management outreach
Risk stratification enables an organization to analyze and minimize the progression of a disease and the development of comorbidities. Once patients in the registry are stratified, organizations must intervene with patients that are on a high-risk trajectory. Over time, as the data becomes richer, the organization can profile and proactively treat patients before they become members of the registry.
Criteria #7: Acquiring external data
Defining the business processes, governance structures, clinical relationships and data-sharing agreements among ACO participants makes this criterion particularly complex. Contrary to current national strategy and focus, acquiring external data should not be a high priority in the current context of the market.
It is geometrically more complicated to manage a patient population beyond the four walls of the core healthcare delivery organization. Taking care of in-house processes and data quality first — an environment easier to influence and control — is a critical tactic to getting started on the right trajectory.
Criteria #8: Communication with patients
Technology options for patient engagement are fragmented and immature but will improve dramatically over the next three years. Today's typical solution for engaging patients is a personal health record. To effectively engage patients, the PHR must evolve into a personal health project management system owned by the patient and decoupled from any particular EMR vendor, ACO or health system. Furthermore, we need to embrace technology platforms and methods that patients use in their everyday lives and make them part of the healthcare delivery process. (This will require some pragmatic adjustments to the industry's application of HIPAA).
Criteria #9: Educating and engaging patients
Our current system for patient education is hampered by a lack of well-vetted, personalized materials. Educational materials aren't tailored enough to address demographic and educational differences or comorbidities. Patient education is also hampered by an ineffective distribution system. Using distribution methods that patients embrace, such as email and text messaging, can positively affect their willingness to use educational materials.
Criteria #10: Complex clinical practice guidelines
A large percentage of the patients that PHM targets are comorbid. As an industry, we have yet to develop effective comorbid treatment protocols. Instead, we rely on multiple single-disease protocols applied to a single patient. These single-disease protocols are linear and don't interact well. Developing comorbid protocols must become a significant focus of our healthcare agenda.
Criteria #11: Care team coordination
PHM requires a more automated method for care team coordination. Care teams need to treat every patient as if they are at the center of a project plan. If patients have had an acute encounter, the team should guide them through recovery milestones. For a chronic disease, the team should present them with a lifetime project plan for health.
The ideal system for care team coordination would function like a project management tool. The entire care team should be able to see the patient's overall project plan, milestones and the responsibilities of each member. Today's EMRs are designed as encounter management tools. Tomorrow's EMRs must incorporate project management concepts into their functionality.
Criteria #12: Tracking specific outcomes
Once ACOs have methods in place for engaging patients, the next step will be to gather outcomes data from patients through those communication channels. Clinicians must have the ability to initiate a tailored outcomes survey from the EMR. The outcomes data that is collected must be integrated back into the EMR and then made available for analytic purposes.
Putting pressure on the vendors
I've painted a detailed picture of what is required for effective PHM. Unfortunately, no single vendor in the healthcare IT market currently meets all 12 of these criteria. The latter criteria are technically and culturally complex and the least developed in the industry.
PHM vendors should focus their product roadmaps on meeting these criteria. Vendors on the financial side of the hospital equation must step up, too, and deliver tools for activity-based costing.
Everything we do today in healthcare is either enabled or constrained by good or bad software. Health system executives are in the best position to put pressure on IT vendors to deliver good software — with the functionality required to drive successful accountable care.
Dale Sanders, a former CIO in healthcare and the U.S. Air Force, has been one of the most influential leaders in healthcare analytics and data warehousing for the past 17 years. He currently serves as senior vice president of strategy at Health Catalyst.