Over the last several weeks, I have been working feverishly to finish our first major report on Population Health Management (PHM), which is now in production. It may appear that we are a little late to the party in providing thoughtful research and analysis on this topic, but honestly, PHM is so nuanced, solutions remain immature and industry best practices have yet to develop, that upon reflection, timing of this report seems just about perfect.
Following are just a few of the insights gleaned from this report.
PHM is Top of Mind
Population health management is now at the forefront of strategic initiatives being undertaken across the healthcare industry. Prompting these strategic initiatives is the massive shift in risk, via payment reform, from payers to providers that is likely to completely redefine the health care delivery system in the U.S. However, the challenge is that by and large, the healthcare sector today is ill prepared to make this transition to a PHM model of care delivery.
There are a number of challenges that stand in the way of healthcare organizations’ (HCOs) adoption of PHM-centric strategies:
- Few HCOs have the requisite expertise in PHM and the technology infrastructure to support this transition.
- The dynamic shift from fee for service (FFS) to value-based reimbursement (VBR) models leaves providers in a difficult situation of having to invest in PHM for the future, with little if any near term returns on investment (ROI).
- IT solutions to support PHM initiatives remain immature requiring HCOs to take a portfolio approach to investing in a range of best of breed solutions to support their PHM strategy.
- PHM will require a significant change in IT architecture from an almost exclusive reliance on systems of record to adoption of systems of engagement.
- No single vendor today offers a fully comprehensive PHM solution suite, though countless vendors will try to convince HCOs otherwise.
Our PHM Perspective
For the purposes of this forthcoming report, we define population health management as:
The proactive management of the health of a given population by a defined network of providers who are financially linked, in partnership with community stakeholders (e.g. social workers, visiting nurses, hospice, patient, caregivers/family, etc.).
Within that short definition there are three important concepts. The first is that providers will move from the current passive management of patient and population health to one that is proactive. Second, that PHM occurs among a defined provider network that is financially linked, in most cases via a contract with a payer or self-insured employer entity. Lastly, that the care team extends beyond the provider(s) to include a community network of stakeholders that play a role in the care of a patient.
While Still Immature, Health IT to Support PHM is Evolving Rapidly
The healthcare industry has been slow to move to a digital, data-driven model of care delivery. It has only been in the last six years that a serious effort has been made industry-wide, via federal incentives, to adopt electronic health records (EHRs) to support the creation of a digital, patient health record. Proficiency in the use of EHRs is slowly improving. However, the industry struggles with a host of issues, from clinical data quality to interoperability across a heterogeneous EHR landscape, to supporting dynamic care teams, all of which will create significant challenges for any PHM program.
On the IT vendor side of the fence, while countless vendors claim to have a PHM solution, none can provide a complete solution today. Therefore, HCOs will be left with the challenge of knitting together best of breed solutions to enable their PHM strategy. Core PHM technology capabilities must include:
- Analytics for risk identification/stratification, performance management, quality and gaps analysis,
- Clinician Network Management/Health Information Exchange (CNM/HIE) infrastructure to distribute and share intelligence across all stakeholders,
- Electronic Health Record (EHR) as a core system of record for patient information,
- Care Management capabilities that optimize care resources within the community served, ensuring care delivery maintains continuity regardless of care setting, and
- Patient Engagement tools that seek to empower the most critical stakeholders – the Patients – in proactively managing their health.
The EHR will play a key role in PHM initiatives as a core system for the patient record, but a number of HCOs today are unfortunately using the EHR as the core solution for PHM.
This strategy is doomed to failure.
PHM is not about one provider, one HCO and therefore one EHR. Population health management requires the active engagement of a multitude of stakeholders across a community all sharing data in support of care delivery processes, regardless of care setting. Monolithic, EHR-centric PHM programs will prove unsustainable over the long term.
Other solutions, such as those to address care management and coordination across a community remain quite immature. A number of payer-centric, care management solutions are pivoting to address provider requirements, but by and large, few have been successful to date.
Patient engagement, despite a significant amount of marketing hype, also remains very immature, largely as a result of its relatively low priority for HCOs’ IT investments, and more logistically because of its unclear home in HCOs’ workflow processes.
In the near term, the greatest focus of resources to support PHM will be targeted at analytics and CNM. The adoption of analytics solutions and services is quite strong today, especially among larger HCOs, to assess population risk, stratify that risk and measure performance. Within the industry as a whole though, the ability to attract and retain data scientists is proving challenging. This has created opportunities for solution vendors to provide complete bundled solutions, including sophisticated analytics services.
But performing data analysis is of little use if it is not proactively used. Delivering data insights to the point of care (PoC) will play a crucial role in a PHM program’s success. Leveraging CNM to enable distribution of analytically derived insights to providers across a community has the potential to dramatically improve quality, reduce variability and improve outcomes.
The lack of maturity within the healthcare sector in developing and deploying the processes, systems and technologies to support PHM will result in a strong market need for solutions that have a strong services component. However, due to severe resource constraints, healthcare organizations will increasingly look for highly modular solutions that allow them to pursue a piecemeal approach to enabling core functions in support of PHM.
Currently, we are seeing strong convergence on a per member per month service pricing (pmpm) model, often times broken out across an array of modules that a vendor may bring to market. Such a model accomplishes two goals. It allows HCOs to incrementally add functionality that aligns with their PHM priorities and budget constraints. Secondly, this model provides a high degree of flexibility for solution vendors to match pricing to the amount of services provided and is particularly amendable to hosted-service models.
Looking further out, however, HCOs will increasingly look to their solution providers to potentially share in some of the risks as well as rewards that may come from adopting their solutions. Over the course of preparing this report, we came across some examples of such, but this is very experimental at this point in time and such contracts are quite narrow in scope.
There still remain a significant number of questions as to how the PHM landscape, both for providers and their solution vendors will evolve over next several years. This upcoming report is just the beginning of our significant, future research on this topic.
As the market develops, Chilmark will continue to delve deeply into what successful PHM initiatives look like and just as importantly, what are the lessons to be learned from unsuccessful PHM programs. There remains a significant amount of uncertainty in how PHM will develop and it is our mission to assist the industry, through our research, in understanding what path may be the most fruitful for any HCO to follow on its journey to PHM.
Stay tuned – the shift in risk from payers to providers and the adoption of PHM strategies to successfully manage that risk will keep us all quite occupied for some time to come.