Financial Analytics Bleeding into Population Health Management

Healthcare costsIt appears that “population health management” (PHM) just has a better ring to it than “accountable care” or “HMO 2.0”. Increasingly, PHM is becoming an umbrella term for all of the operational and analytical HIT tools needed for the transition to value-based reimbursement (VBR), including EHR, HIE, Analytics, Care Management, revenue cycle management (RCM), Supply Chain, Cost Accounting, … .

On the other hand, HIT vendors continue to define PHM according to their core competencies: claims-based analytics vendors see PHM in terms of risk management; care management vendors are assuming that PHM is their next re-branded marketing term; clinical enterprise data warehouse (EDW) and business intelligence (BI) vendors argue that a single source of truth is needed for PHM; HIE and EHR vendors talk about PHM in the same breath as care coordination, leakage alerts and clinical quality measures (CQM); and so on.

We at Chilmark have not articulated a single vision for where PHM ends and all other VBR related HIT begins for the simple reason  that “It Depends.” It depends on where you are starting, it depends on your existing IT infrastructure in place, it depends on the community you serve and the structure of your clinical team (acute, ambulatory, long-term care, affiliate vs owned mix, etc.). There is not an easy answer here.

That being said, we are in the process of articulating these issues in a forth-coming Insight Report and it appears that Dale Sanders, SVP at Health Catalyst, has jumped the gun with his own articulation of PHM and what is required to be successful in his recent Population Health Management report.

Note: Vendor-produced papers that rank the sponsoring vendor in question as the top dog are often easily dismissed as biased, despite any claims of impartiality on the part of the author.  This one I found worth the read, however, despite such bias.

Sanders’ initial few paragraphs did a good job of clarifying the difference between, as he puts it:

  • “Optimizing The Health of Large Populations” (Population Health Management)
  •  “Managing Fixed Price Contracts For Health Management” (financial, contracts, risk side of things)

Dale Screen Shot


However at this point in time, there is a huge disconnect between groups dedicated to PHM — quality and care mgmt. groups — and those dedicated to financial & risk mgmt. In one recent conversation with an HCO executive, he mentioned a HCO in their region that had aggressively moved towards VBR, a push by senior executives including the CFO, that was ultimately rejected by clinical executives leading to exodus of CFO and a number of other executives.  This division between clinical and financial leads us to propose the following Venn that represents where we are today.


As the above diagram shows, we are seeing the line between PHM and financial mgmt. blurring over the last few years. Network leakage, total cost of care, utilization KPIs, risk scoring, etc. are increasingly being discussed in the same breath as PHM.

These financial data are desired by HCOs to better manage population risk — across both care management and performance management functions.  For example, a care manager might wish to view the predicted total cost of care for a set of high-risk patients; or a risk manager might want a dashboard that combines paid-claims-based risk scores with clinical-based quality measures.

Going forward, I don’t know if financial departments within HCOs will ever become fully united with clinical teams under the common purpose of PHM and more broadly, VBR. I however do see the “bleeding” increasing, as cost accounting systems, and elements of RCM and staffing become more intertwined with PHM needs in support of a VBR strategy.

My upcoming 2014  Population Health Analytics report will explore these and many other trends further… and thanks to Dr. Sanders for the catalyst to write this post.







Free Research: Migration to Clinician Network Mgmt

CNMLast summer we published another edition of our popular Health Information Exchange (HIE) Market Trends Report. Over the years, this report has for many, become the “authoritative source of information on the HIE Market.” That’s not me talking, that is exactly what we have heard from those who have purchased this report.

This, of course, makes us feel quite proud as our mission here at Chilmark Research is pretty straight-forward:

Provide research that will assist Healthcare Organizations (HCOs) in their understanding, assessment, adoption, deployment and use of IT to improve the quality of care delivered. 

This is what get us up in the morning. This is what motivates us for everyone here at Chilmark wants to make a contribution to improving this crazy, at times frustrating, market sector.

With the release of the latest 2013 HIE Market Trends Report, however, I had an uneasy feeling. The vast majority of the market continued to view HIE as just that, moving basic health information from point A to point B. If anything, HIE has been further dumbed-down with the advent of Direct Secure Messaging, which is really nothing more than secure, point-to-point email – a far cry from interoperability and query-based information exchange.

Another issue was that I was not seeing much thought going into what is next for HCOs and their investments in HIE. Recent reports such as HIEs reduce ED visits is something we have been talking about for years. Seriously, is this the best we can come up with? What new capabilities will HCOs want (or be able) to enable across their HIE? What is the next level of value realization beyond basic records exchange and lab orders/referrals?

I increasingly came to the realization that the vocabulary of how we talk about HIE needed to change. Language is powerful and our current fixation on HIE and the vocabulary associated with it may be preventing this industry from looking beyond this limited construct. For the purposes of that 2013 HIE report, we used the term HIE 2.0 (did I ever mention I have never been a fan of 2.0 attached to any acronym) to signal a change.

In late fall of 2013, after some discussions with clients, consultants and HCO executives, we decided there was the need to test these ruminations. Chilmark put together a prospectus for a research project on Clinician Network Management (CNM) and found five willing sponsors for this research (CareEvolution, McKesson, Optum, Orion Health and one that prefers to remain anonymous). The research objective was to conduct primary research to determine the state of the market in moving to enable CNM, which goes under many guises including physician alignment, clinically integrated networks, etc. but none of these terms have quite the scope that we envisioned for CNM.

Some of the results of our CNM research are quite telling.

  • The market is roiling under massive structural changes.
  • Most HCOs are ill-prepared for the move to from fee-for-service to value-based reimbursement (VBR), though all see it coming.
  • Those select HCOs who are now preparing for VBR are looking to be quite prescriptive in their requirements of affiliated and owned physicians – that will be supported via a CNM model.
  • There remains a divide (level of distrust) between payers and providers that will take time to mend despite the need for both to work more closely together.
  • HIT vendors are, by and large, not keeping up with the needs of HCOs to support CNM initiatives.
  • A best-of-breed approach is seen as only path forward today to enable CNM.

Of course, we learned far more than the above which you’ll find in the report itself. Since this report was sponsored with the intent of helping to educate the market, it is being offered for free. I encourage you to grab a copy – you won’t be disappointed.



HIMSS or Bust

CA or bustNext week is that proverbial event we all, in the HIT industry, look forward to with some trepidation - HIMSS’14. For an analyst firm such as ours HIMSS provides us a great opportunity to talk with end users, vendors of all stripes and just reconnect with like-minded folks. HIMSS is probably the only annual event that is a must attend to get a good perspective on where we are, as an industry, in advancing the adoption, deployment and use of HIT in the provider setting. That’s the upside.

There is a downside to HIMSS as well. Like most conferences of its type, HIMSS is a huge cheerleading event for all things HIT. In many ways, HIMSS is like the town of Lake Wobegon, where all of the children are above average. You will almost never hear anything called into question – no negativity here folks. Everything looks rosy and as one cruises the exhibit hall vendors pitch what they believe is the next big thing in healthcare.

HIMSS is the epitome of buzz-card bingo. Be forewarned ye vendors for which meetings between us have been scheduled for every time I hear “Big Data” I will yell out, BINGO! 

As Naveen pointed out in his recent post, HIMSS and the vendors therein must be approached with a healthy bit of skepticism. But as analysts, we must do our best to not let that skepticism slip into cynicism, for a cynic often paints a broad negative brush, losing their objectivity in the process and not see the good things that are happening as well.

HIMSS is also a fairly large event and I know that no matter how comfortable my shoes, no matter how much rest I get beforehand, by the time I take that flight back to Boston, I will be absolutely spent.

Despite these downsides, I am actually really excited about HIMSS this year and can’t wait to get there.

First and most importantly, this year’s event will be the first time that we have our entire team attending. Not only has this lessened my own meeting burden (last I counted, this year I only have 24 meetings in 3 days vs last year’s 35), it also gives us a great opportunity to interact with a far broader range of stakeholders in the HIT market with analysts focused on analytics, patient engagement, HIE, EHR and the biggest buzzword from last year, population health management (PHM).

I have always returned from HIMSS with new, invaluable contacts and an updated perspective on where the industry is truly at – not the picture the vendors paint, but the composite, the collage that is created from countless conversations over those three to four days of attendance. In having the Chilmark team there, I hope they will also walk away from HIMSS with a similarly refreshed rolodex and some nuanced thoughts on how their respective research domains will evolved in the years to come.

Secondly, we are seeing some interesting trends in the market as of late that need further validation. For example, today PHM is whatever a vendor decides it to be based on their own core competencies. Our conversations with healthcare organizations (HCOs) has not been all that insightful either as their PHM definitions are as disparate as the vendors. Where there is convergence though is on the need for strong analytics to drive PHM initiatives. So if analytics is the engine, what is the steering wheel, what are the tires, is HIE the gas tank, or the fueling station?

Looking to HIE, as we mentioned in late 2013, we see a need to redefine this sector. Where is the next opportunity for value realization for a provider once their HIE is live? Yes, we are looking beyond referrals! We have our own ideas, but we want to bounce those ideas off of others – HIMSS is a fabulously opportunity to do just that.

These are just a couple of my own thoughts. Our analysts; Cora for analytics, Naveen for patient engagement, Rob for EHR and Brian on HIE, all have their own questions they seek answers to. Hopefully, HIMSS will prove fruitful for us all in finding some of the answers we seek on the future trajectory of HIT, where the value is to be found and how together, we can all work towards a healthcare system that delivers ever higher quality care to all.


Payers Refocus Efforts on ROI for Member Engagement

cvrWhat a difference a year has made to the payer market. In late 2012 Chilmark Research published the first version of our Payer Benchmark report — detailing how leading payers were beginning to adopt emerging consumer technologies. We found a market where significant experimentation was occurring, but little if any broad, member wide deployments and a market still trying to understand social media.

This week we are releasing the next iteration of this report – Benchmark Report 2013: Payer Adoption of Emerging Consumer Tech – Payers Continue their Pursuit of the Digital Consumer. Based on the research I conducted for this report, I find it simply amazing to see how this market has shifted over the course of a single year.

For one thing, the traditional health insurance business model continues to erode, as the Affordable Care Act (ACA) has capped medical loss ratios (MLRs) and has completely stripped payers of their ability to underwrite based on health risk.

Meanwhile, payer-provider realignment is ongoing. Hospitals are partnering directly with employers or launching health plans that might compete with payers in the employer market. Likewise, some payers are acquiring providers to more closely align financial interests with healthcare services delivered.  All this bodes well for rising interest in payer-provider-aligned population health management and patient engagement technologies.

In addition, the ACA/Obamacare has come to be seen as inevitable, and Health Insurance Exchanges (HIX) are forcing payers to seek out new places in the minds of consumers and within the broader healthcare ecosystem –  with an increasing focus on engaging and retaining consumers.

Outside of healthcare, the consumer tech space continues to defy our expectations.  It is easy to see how in the past year that emerging, low-cost activity tracking technologies have spread far beyond early adopters.

These and other macro forces are pushing payers toward the digital consumer in ever more multi-faceted ways.  For example, payers have drastically pulled back from their flurry of experimentation in 2012, and are now focusing their efforts into fewer, more precise areas where they foresee strong potential for ROI.

One change from 2012 is the pull-back in creating mobile app versions of member service portals, as have health & wellness app launches. (This makes sense: in general, very few payer-launched or payer-owned mobile apps have gained any kind of significant traction, with iTriage as a notable outlier, and they already had good traction prior to acquisition by Aetna).


While payers may have pulled back from rapid experimentation along certain lines, this does not mean that they have given up on the digital consumer. To the contrary, we continue to see growing investment in payer-owned consumer platforms, biometric tracking initiatives, the next generation of social media, and more… all detailed in the report.

This report profiles an expanded set of payers as compared to the first edition, across commercial, Blues, and provider-aligned categories. These innovative payers are exploring the wild west of digital consumer engagement and learning as they go. The report describes their experimentation in detail, what initiatives are working and why, and where promising new territory might lie. Any organization that is looking to build-out a strategy that leverages consumer tech for member/patient engagement will find this report invaluable.

We hope our subscribers enjoy the read…as much as we enjoyed the research.


The Two Faces of Population Health Management

As we head into the New Year, we at Chilmark Research have been thinking a lot about how we will approach Population Health Management (PHM) in 2014, and beyond.

PHM is actually a pretty unfortunate term for the data-driven business processes and associated tech stack that HCOs must adopt as they head towards value-based reimbursement. But, the term is here to stay and therefore we must embrace it (besides, does anyone have a better term that does not include “Big Data” or “Accountable Care”?)

In August, we released our first market trends report addressing one aspect of enabling PHM: 2013 Clinical Analytics for Population Health Management Report. We are now working on the next iteration of this seminal research report, and as the market evolves, we must continually ask ourselves: “What does Population Health Management mean today?”

In public health circles, the concept of PHM is simple: increase a set of quality KPIs across a population that includes both low and high-risk groups.

In the real world, PHM is what is happening as providers move from FFS to value-based payment models — effectively forcing them to adopt HIT to (1) improve and report on ever proliferating quality metrics, and (2) move from a “cost plus” business model to one of cost containment.

Currently, we see PHM divided into two main categories that were previously, by and large, the responsibility of payers and vertically integrated HCOs: Care Management, and Performance Management. Below is a tech stack figure that I am using to visualize these two categories:

Care Management involves managing patients –both during and between visits– according to standardized protocols. The hope is that by identifying sources of patient health risk and through clinician intervention, costly utilization can be prevented and/or quality measures attained. Analytics and associated content are required to build out the necessary quality measures, care gaps, predictive models, etc. Workflow tools are needed so that clinical and care management teams can take timely action.

Care Management solutions on the market today are incredibly heterogeneous, ranging from basic disease registry dashboards to full-fledged care coordination workflows that can span an exceedingly wide range of care venues.

Performance Management is the domain of the Chief Medical Officer (CMO), CMIO, CFO and department leaders. This category of tools is informed by analytics and is meant to identify opportunities for care delivery process improvement across the HCO’s network. The emphasis is on turning the HCO into an efficient and cost effective organization (improving the health of a population might be a side effect).

For example, consider how important it is to identify which orthopedic surgeons are responsible for the highest variation in length-of-stay (LOS) and cost:

Yes, there is overlap between these two categories. For example, a physician leader might want a dashboard to view aggregate quality measures for different cohort populations, as well as have the ability to slice and dice and drill down to specific patient outliers. In addition, utilization and cost metrics are increasingly being used within care management tools as a way to identify high-risk patients.

One thing we at Chilmark Research continue to debate is how the definition of PHM might keep expanding. It is easy to define certain boundaries. We do see PHM as care delivery and care management centric – it is not about optimizing all HCO operations. Therefore, Chilmark will not wade not wading into RCM or supply chain/staffing territory when it conducts research on PHM.

Other boundaries, however, are not as easy to define. For example, what about  data mining tools that monitor inpatient vital signs in real time to predict sepsis? What about treatment pathways and the data-driven AI tools of the future that are meant to replace doctors? These should all have tremendous impact on patient health, right? Not to mention how activity-based costing systems (ABC) will eventually integrate with PHM systems (e.g., Intermountain’s relationship with Cerner).

The bottom line in my research that I will keep coming back to is the concept of driving care delivery efficiencies under value-based reimbursement, and the current separation between performance management and care management. Having said that, I look forward to 2014 where we will see if the term PHM will stand the test of time, or go the way of ACO-enablement.

Lastly, I invite our readers to chime in or contact me directly with their thoughts on PHM. Do you agree with how we have scoped out our PHM research? Is there anything that is currently a prioritization  at your organization that I have overlooked? I look forward to hearing from you.




Time to Move Beyond HIE

CNMOur ongoing coverage of the HIE industry leads us to the question of what clinicians do after getting connected to an HIE?

To this end, we are conducting a 10-minute web survey on clinician’s experiences using HIEs for care coordination. We want to understand how clinicians are using HIEs today in their daly activities. If you are a credentialed clinician with any experience using an HIE of any kind, we invite you to take the survey by clicking on this link.

In appreciation for completing the survey, we will provide a $50.00 Amazon gift certificate for the first 50 completed surveys we receive from verifiable clinicians (i.e. a working email address at the end of the survey). We are particularly looking for clinicians working in large group practices or in post-acute care but any care venue is appropriate. Just remember, you must be a credentialed clinician, have a good sense of how your HCO is or should be using an HIE, complete the entire survey and provide us with an email address to qualify (and also so we know where to send that Amazon GC). Don’t worry, we promise to never to disclose your name or the name of your organization and your contact details to anyone, for any reason.

Why are we doing this?
Simple. The days of thinking about HIE as basic plumbing are over. Enabling HIE remains complex and expensive due to the lack of interoperability across the heterogeneous EHR landscape found in most communities. At a recent conference, David Kibbe of DirectTrust gave a presentation with the following data points.

In one Arizona County there are…

Specific Data Points

  • ~6400 physicians
  • ~70 EHR vendor products
  • 58 of these vendors have fewer than 100 physician customers each
  • 104 Walgreens locations
  • 64 CVS locations
  • 8 HIEs
  • 1 Immunization Registry

Unspecific Data Points

  • Some number of reference labs
  • Some number of imaging centers
  • Some number of long term care providers and facilities
  • Some number of home care provider organizations with some number of nurses, home health aides, assorted other clinicians and social workers
  • One state ELR system and disease surveillance system

While we certainly recognize why many still speak of HIE in the context of just stitching together communities of practice and their disparate EHRs; to truly move forward, healthcare leaders need to stop thinking that they are enabling HIE. Thinking within the construct of HIE is a natural, self-limiting proposition that does not focus on value realization.

Follow the Money – Network Management Critical
As the industry makes the massive transition from fee-for-service to value-based reimbursement models, the long-term success (or ultimate failure) of a healthcare organization will be highly dependent on their ability to effectively manage their clinician network, both owned and affiliated. And when we say manage, we are not talking about heavy-handed management, but more about ensuring that all in-network clinicians are aligned along the same goals and objectives to maximize reimbursement. Network of clinicians need to work together to accomplish such goals as:

  • Successful care transitions that minimize readmits
  • Managing care gaps
  • Define, distribute and track clinical pathways
  • Keeping those at risk of chronic disease from contracting the disease
  • Effectively manage patients with chronic disease(s)
  • Practice score-carding to identify outliers and take corrective action
  • Assign attribution based on contract terms and clinician involvement

Virtually all ambulatory practices do not have the resources to address the above and their EHRs certainly won’t get them there either. Only the parent HCO has the resources and expertise to enable this advance functionality and it is their job to insure such is distributed to their network and owned and affiliated physicians.

Our hypothesis is that large HCOs are searching for ways to influence clinical processes and workflow outside their walls and will leverage their HIE infrastructure to do so. At the same time, community-based clinicians need better access to better information so they know what is expected of them when treating shared risk patients. In the next year, we will be looking at the ways that HCOs are building alignment within their networks of physicians – owned or affiliated – to establish common care goals and objectives that also maximize contract opportunities for everyone.

This survey is the first step in our research on the necessary transition from HIE to Clinician Network Management (CNM). Time to roil the industry and think beyond the limited confines of HIE to the value that can be delivered within a clinician network.