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Achieving ROI from Population Health Investments: How Realistic is it?

April 5, 2017
by Rajiv Leventhal
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A senior consultant at Advisory Board emphasizes that healthcare organizations are thinking about ROI from population health investments in the wrong manner

In January 2015, a survey from KPMG found that more than half of the nearly 300 healthcare manager respondents expected to recoup their investments in population health management programs within three to four years. This same report found that just 24 percent of respondents surveyed saw their own population health management capabilities as "mature" and 38 percent described their capabilities as in the "elementary stages." Nearly 15 percent of those surveyed saw their population health capabilities as "nonexistent" or in their infancy (23 percent).

Two years later, population health investments are widespread across the sector—San Francisco-based Rock Health continues to see population health-specific venture investing as one of the biggest digital health funding areas—but healthcare system leaders are still grappling with how to determine ROIs from these investments.

Nonetheless, as newer payment models become linked to population-based outcomes, organizations will undoubtedly need the right tools in place to successfully evaluate population health and target improvement opportunities. To help such healthcare leaders, last year Dennis Weaver, M.D., chief medical officer and executive vice president, consulting at Washington, D.C.-based Advisory Board, led the development of a population health maturity model after surveying senior executives at 30 U.S. health systems.

The model has five stages: The Skeptic; The Intender; The Builder; the Advancer; and The Committed, and to evaluate an organization’s maturity level, Weaver and his team started by looking at the number and flavor of risk-based contracts. Weaver, who is based in Nashville, says that “If you look on the delivery system side of the ledger, organizations on the high end in terms of how much of their business is risk-based or accountable care-based, may still have 20 to 30 percent of their revenue that’s truly at risk, and the rest [of their revenue] is fee-for-service. Most organizations sit in that 10 to 15 percent range.” Weaver says that overall, although most people would assume that organizations would largely be on the left side of the model—meaning the less mature side—since there were a fair number of those surveyed that had their own provider-sponsored health plan, those organizations’ scores fell much more to the mature side of the model.


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Dennis Weaver, M.D.

Weaver’s team then looked at what the variables are that separate the advanced organizations from the rest of the pack. One of these factors is that the organization leverages system-wide technology to analyze in-network utilization, and report on cost and quality, something that requires real investment in data and analytics. Weaver says technology was “split out” as a variable since it deserves to be its own component. He adds that just having an electronic health record (EHR)—even if the organization is HIMSS Stage 7-designated and has an EHR with CPOE functionalities and disease registries within it—is not enough to take on risk. “You need additional business intelligence tools to sit on top of the EHR to allow you to be successful,” he says. “Some of those capabilities include risk stratification and segmenting populations, and once you segment them, understanding where there are gaps in care and services, then fulfilling those gaps, and then have outcomes measures that allow yourselves to be successful, both on the financial side and the clinical measurement side.”

Weaver notes that from the organizations they have measured, the biggest technology gaps they found were that most places were much more advanced on the clinical side, compared with the financial or economic side, in both risk stratification, and in the implementation steps and the measurement steps. “If they were lagging on the IT front, it was not having the maturity of financial tools to help them understand the economics for where they were in these risk-based contracts,” he says.

Thinking about ROI

One thing that many organizations continue to do wrong, Weaver says, is think about the ROI for population health based on how they are performing in their managed care contracts. “So they think about it from the [standpoint of] getting shared savings, making money on their capitation contracts, and not having to pay downside risk. There is a whole revenue stream that goes along with that bucket,” he says. “They are trying to pay for all of the investment—the technology, care managers, operational changes, medical homes—all with the accountable payment bucket.”

But Weaver feels that there are actually two other buckets that most other organizations have not put into their population health business plan: reduction of leakage and unwarranted care variation. Regarding reduction of leakage, or having patients not go out of network, Weaver emphasizes that healthcare systems have to keep patients in the system for which they are getting paid for. “A lot of organizations don’t use their IT tools, care managers, and all their different capabilities to keep people within the system. Yet we find that the revenue opportunities to get the ROI for the investments they make are 7 to 10 times greater in the ‘keeping patients inside the system’ bucket than they are in the ‘accountable payment’ bucket,” he says.

The second category Weaver mentions is unwarranted care variation, referring to the variability of care leading to different outcomes and increased costs. Here, Weaver says that, “You can contractually, and we call this a hospital efficiency improvement program, have the acute care enterprise work with the population health management side of the business to reduce that unwarranted care variation. And in this bucket, you can get a big ROI as well, even bigger than with the reduction of network leakage.” He says that across health systems, there is potentially a 5 to 10 percent margin improvement that can be achieved by reducing care variation.

Both Weaver and James Green, managing partner for revenue cycle at Advisory Board, note that healthcare organizations are struggling with having their feet in two payment buckets—fee-for-service and value-based care. As Green puts it, “You have two feet in different payment worlds, with a child-sized foot in value-based care, and an adult-sized foot in fee-for-service.” He adds, “So you’re trying to look for an ROI, yet not overinvest in value-based care so that the revenue you’re counting on is still coming in.” As such, Weaver again stresses that “Too many people look at that accountable payment bucket to calculate ROI.”

Moving forward, Weaver notes that some folks believe the transition of administrations in D.C. has led some people to take their feet off the accelerator when it comes to making investments. But he also feels that “the industry will continue to move in this [value-based purchasing] direction and you will have to be competent in this space.”

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NCQA Moves Into the Population Health Sphere With Two New Programs

December 10, 2018
by Mark Hagland, Editor-in-Chief
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The NCQA announced on Monday that it was expanding its reach to encompass the measurement of population health management programs

The NCQA (National Committee for Quality Assurance), the Washington, D.C.-based not-for-profit organization best known for its managed health plan quality measurement work, announced on Dec. 10 that it was expanding its reach to encompass the population health movement, through two new programs. In a press release released on Monday afternoon, the NCQA announced that, “As part of its mission to improve the quality of health care, the National Committee for Quality Assurance (NCQA) is launching two new programs. Population Health Program Accreditation assesses how an organization applies population health concepts to programs for a defined population. Population Health Management Prevalidation reviews health IT solutions to determine their ability to support population health management functions.”

“The Population Health Management Programs suite moves us into greater alignment with the focus on person-centered population health management,” said Margaret E. O’Kane, NCQA’s president, in a statement in the press release. “Not only does it add value to existing quality improvement efforts, it also demonstrates an organization’s highest level of commitment to improving the quality of care that meets people’s needs.”

As the press release noted, “The Population Health Program Accreditation standards provide a framework for organizations to align with evidence-based care, become more efficient and better at managing complex needs. This helps keep individuals healthier by controlling risks and preventing unnecessary costs. The program evaluates organizations in: data integration; population assessment; population segmentation; targeted interventions; practitioner support; measurement and quality improvement.”

Further, the press release notes that organizations that apply for accreditation can “improve person-centered care… improve operational efficiency… support contracting needs… [and] provide added value.”

Meanwhile, “Population Health Management Prevalidation evaluates health IT systems and identifies functionality that supports or meets NCQA standards for population health management. Prevalidation increases a program’s value to NCQA-Accredited organizations and assures current and potential customers that health IT solutions support their goals. The program evaluates solutions on up to four areas: data integration; population assessment; segmentation; case management systems.”



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At the D.C. Department of Health Care Finance, Digging into Data Issues to Collaborate Across Healthcare

November 22, 2018
by Mark Hagland, Editor-in-Chief
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The D.C. Department of Health Care of Finance’s Kerda DeHaan shares her perspectives on data management for healthcare collaboration

Collaboration is taking place more and more across different types of healthcare entities these days—not only between hospitals and health insurers, for example, but also very much between local government entities on the one hand, and both providers (hospitals and physicians) and managed Medicaid plans, as well.

Among those government agencies moving forward to engage more fully with providers and provider organizations is the District of Columbia Department of Health Care Finance (DHCF), which is working across numerous lines in order to improve both the care management and cost profiles of care delivery for Medicaid recipients in Washington, D.C.

The work that Kerda DeHaan, a management analyst with the D.C. Department of Health Care, is helping to lead with colleagues in her area is ongoing, and involves multiple elements, including data management, project management, and health information exchange. DeHaan spoke recently with Healthcare Informatics Editor-in-Chief Mark Hagland regarding this ongoing work. Below are excerpts from that interview.

You’re involved in a number of data management-related types of work right now, correct?

Yes. Among other things, we’re in the midst of building our Medicaid data warehouse; we’ve been going through the independent validation and verification (IVV) process with CMS [the federal Centers for Medicare and Medicaid Services]. We’ve been working with HealthEC, incorporating all of our Medicaid claims data into their platform. So we are creating endless reports.


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We track utilization, cost, we track on the managed health plan side the capitation payments we pay them versus MLR [medical loss ratio data]; our fraud and abuse team has been making great use of it. They’ve identified $8 million in costs from beneficiaries no longer in the District of Columbia, but who’ve remained on our rolls. And for the reconciliation of our payments, we can use the data warehouse for our payments. Previously, we’d have to get a report from the MMIS [Medicaid management information system] vendor, in order to [match and verify data]. With HealthEC, we’ve got a 3D analytics platform that we’re using, and we’ve saved money in identifying the beneficiaries who should not be on the rolls, and improved the time it takes for us to process payments, and we can now more closely track MCO [managed care organization] payments—the capitation payments.

That involves a very high volume of healthcare payments, correct?

Yes. For every beneficiary, we pay the managed care organizations a certain amount of money every month to handle the care for that beneficiary. We’ve got 190,000 people covered. And the MCOs report to us what the provider payments were, on a monthly basis. Now we can track better what the MCOs are spending to pay the providers. The dashboard makes it much easier to track those payments. It’s improved our overall functioning.

We have over 250,000 between managed care and FFS. Managed care 190,000, FFS, around 60,000. We also manage the Alliance population—that’s another program that the district has for individuals who are legal non-citizen residents.

What are the underlying functional challenges in this area of data management?

Before we’d implemented the data warehouse, we had to rely on our data analysis and research division to run all the reports for us. We’d have to put in a data request and hope for results within a week. This allows anyone in the agency to run their own reports and get access to data. And they’re really backed up: they do both internal and external data reports. And so you could be waiting for a while, especially during the time of the year when we have budget questions; and anything the director might want would be their top priority.

So now, the concern is, having everyone understand what they’re seeing, and looking at the data in the same way, and standardizing what they’re meaning; before, we couldn’t even get access.

Has budget been an issue?

So far, budget has not been an issue; I know the warehouse cost more than originally anticipated; but we haven’t had any constraints so far.

What are the lessons learned so far in going through a process like this?

One big lesson was that, in the beginning, we didn’t really understand the scope of what really needed to happen. So it was underfunded initially just because there wasn’t a clear understanding of how to accomplish this project. So the first lesson would be, to do more analysis upfront, to really understand the requirements. But in a lot of cases, we feel the pressure to move ahead.

Second, you really need strong project management from the outset. There was a time when we didn’t have the appropriate resources applied to this. And, just as when you’re building a house, one thing needs to happen before another, we were trying to do too many things simultaneously at the time.

Ultimately, where is this going for your organization in the next few years?

What we’re hoping is that this would be incorporated into our health information exchange. We have a separate project for that, utilizing the claims data in our warehouse to share it with providers. We’d like to improve on that, so there’s sharing between what’s in the electronic health record, and claims. So there’s an effort to access the EHR [electronic health record] data, especially from the FQHCs [federally qualified health centers] that we work closely with, and expanding out from there. The data warehouse is quite capable of ingesting that information. Some paperwork has to be worked through, to facilitate that. And then, ultimately, helping providers see their own performance. So as we move towards more value-based arrangements—and we already have P4P with some of the MCOs, FQHCs, and nursing homes—they’ll be able to track their own performance, and see what we’re seeing, all in real time. So that’s the long-term goal.

With regard to pulling EHR information from the FQHCs, have there been some process issues involved?

Yes, absolutely. There have been quite a few process issues in general, and sometimes, it comes down to other organizations requiring us to help them procure whatever systems they might need to connect to us, which we’re not against doing, but those things take time. And then there’s the ownership piece: can we trust the data? But for the most part, especially with the FHQCs and some of our sister agencies, we’re getting to the point where everyone sees it as a win-wing, and there’s enough of a consensus in order to move forward.

What might CIOs and CMIOs think about, around all this, especially around the potential for collaboration with government agencies like yours?

Ideally, we’d like for hospitals to partner with us and our managed care organizations in solving some of these issues in healthcare, including the cost of emergency department care, and so on. That would be the biggest thing. Right now, and this is not a secret, a couple of our hospital systems in the District are hoping to hold out for better contracts with our managed care organizations, and 80 percent of our beneficiaries are served by those MCOs. So we’d like to understand that we’re trying to help folks who need care, and not focus so much on the revenues involved. We’re over 96-percent insured now in the District. So there’s probably enough to go around, so we’d love for them to move forward with us collaboratively. And we have to ponder whether we should encourage the development and participation in ACOs, including among our FQHCs. Things have to be seen as helping our beneficiaries.

What does the future of data management for population health and care management, look like to you, in the next several years?

For us in the District, the future is going to be not only a robust warehouse that includes claims information, vital records information, and EHR data, but also, more connectivity with our community partners, and forming more of a robust referral network, so that if one agency sees someone who has a problem, say, with housing, they can immediately send the referral, seamlessly through the system, to get care. We’re looking at it as very inter-connected. You can develop a pretty good snapshot, based on a variety of sources.

The social determinants of health are clearly a big element in all this; and you’re already focused on those, obviously.

Yes, we are very focused on those; we’re just very limited in terms of our access to that data. We’re working with our human services and public health agencies, to improve access. And I should mention a big initiative within the Department of Health Care Finance: we have two health home programs, one for people with serious mental illness issues, the other with chronic conditions. The Department of Behavioral Health manages the first, and the Department of Health Care Finance, my agency, DC Medicaid, manages the second. You have to have three or more chronic conditions in order to qualify.

We have partnerships with 12 providers, in those, mostly FQHCs, a few community providers, and a couple of hospital systems. We’ve been using another module from HealthEC for those programs. We need to get permission to have external users to come in; but at that point, they’d be able to capture a lot of the social determinants as well. We feel we’re a bit closer to the providers, in that sense, since they work closely with the beneficiaries. And we’ve got a technical assistance grant to help them understand how to incorporate this kind of care management into their practice, to move into a value-based planning mode. That’s a big effort. We’re just now developing our performance measures on that, to see how we’ve been doing. It’s been live for about a year. It’s called MyHealth GPS, Guiding Patients to Services. And we’re using the HealthEC Care Manager Module, which we call the Care Coordination Navigation Program; it’s a case management system. Also, we do plan to expand that to incorporate medication therapy management. We have a pharmacist on board who will be using part of that care management module to manage his side of things.



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