The most logical place to begin Population Health Management in any setting is by honing in on an organization’s sickest patients. According to the Agency for Healthcare Research & Quality (AHRQ), five percent of the population accounts for roughly half of all healthcare costs. These “super utilizers”, or “frequent flyers”, are admitted to the hospital two to four times a year, have lengths of stay measured in weeks instead of days, and rack up tens of thousands in hospital costs.

Hennepin County Medical Center in Minneapolis is one of hundreds of hospitals across the country working to develop a structure to coordinate the care of the chronically sick. Dr. Paul E. Johnson, a pulmonologist at Hennepin, explains, “… the [frequent flyers] aren’t trying to get admitted; they’re not trying to spend too much money. There’s just not a system helping them not to do that. The folly in our care system is that we try to saddle providers with patients who have such complex social and behavioral needs, and we don’t give them any tools to do the job.” Dr. Johnson and Hennepin are creating the tools to study frequent flyer utilization patterns and determine how to avoid preventable readmissions, improve patient health, and decrease costs. In one year, Dr. Johnson and his team’s efforts have reduced inpatient care stays by 25 percent and ED visits by 37 percent.

Formal structures being used for Population Health Management include Patient Centered Medical Homes (PCMHs) and Value-Based Care Organizations (ACOs). Though these structures vary in terms of how hospitals and their aligned physicians are tied to insurance and managed care companies, they have three elements in common:

Emory Healthcare in Atlanta, GA has established a PCMH that charges lower premiums and co-pays to the 40,000+ employees on Aetna’s health plan if they follow the course of treatment prescribed by their primary care physicians, including medication compliance and follow-up visits to manage chronic issues such as diabetes or high blood pressure. According to Atlanta’s CDC office, every $1 spent on programs focused on educating patients on diabetes self-management reduces healthcare expenditures by $9. If a medical home-enrolled patient strays from the recommended course of care, they can be expelled from the medical home and relegated to a different health plan. Physicians in Emory’s PCMH are rewarded via improved rates for “time” spent with patients rather than how many patients they see in a day. Over the past few years, most primary care physicians in the PCMH have gone from seeing 20 to 30 patients a day to 10 to 15 a day. This is a prime example of how the Affordable Care Act is migrating healthcare from fee-for-service to fee-for-value.

Though there are no specific CMS-approved metrics or reimbursement rewards for any improvements made in Population Health Management, it is widely expected that there will be in the future. In the near-term, hospitals, health systems and physicians can maximize the benefits of Population Health Management by focusing on the sickest few who account for most of the cost.

Travis Ansel

Chief Executive Officer and Managing Director, Strategy