What Are Bundled Payments and Are They Here to Stay?

Key Takeaways

  • Current vendor solutions are limited and generally require additional advisory services.
  • Few available solutions offer workflow integration, especially across post-acute care settings, to assist in the execution of bundled episodes.
  • Larger HCOs will weather the shift to bundled payments more easily than their smaller counterparts, especially as bundled payments begin to scale across multiple service lines.

Bundled payments have been looming on the horizon for healthcare organizations (HCOs) at varying degrees of intensity for at least the last thirty years. As healthcare costs have continued to rise, payers and providers are increasingly viewing bundled payments as a viable alternative to fee for service (FFS) payment structures.

Recognizing that this trend is here to stay, we authored the upcoming report, Bundled Payments: Current Strategies and Tools, to help HCOs understand the impetus behind bundled payments as well as provide a detailed perspective on how healthcare information technology (HIT) vendors are prepared to support this payment modality transition.

The Drive for Bundled Payments

Bundled payments are positioned to serve as a transition between FFS and capitation. By definition, a bundled payment links multiple provider payments into one care management and payment system during a specific episode of patient care during a defined period of time. There are two types of bundles: prospective and retrospective.

A retrospective bundle incorporates a reconciled budget with the payer or “convener” as a financial integrator of the fees paid out instead of putting the responsibility upon one provider. This arrangement is built upon a FFS system and is retrospective because providers first receive their usual FFS payments, and then they receive an additional payment after their total costs are assessed and if cost savings were generated. However, cost assessments can take a year or more to complete after services are initially provided.

A prospective bundle pays a fixed price for a set of services covered in the bundle before all of the services are rendered. An average cost per episode of care is determined based on historical data and/or regional costs and payment is delivered to providers when an episode is initiated, rather than waiting until the entire episode has been completed. Adjustments to payments are made after the fact to account for outliers, excluded episodes, and other factors.

Retrospective payment bundles are the most widespread bundled payment system primarily due to the abundance of participation in the Bundled Payments for Care Improvement (BCPI) Initiative and the Comprehensive Care for Joint Replacement (CJR) model. Retrospective payments for bundles are also easier to understand, administer, and execute, which is why they comprise the majority of bundled payment financing arrangements to date.

A CMS-led Initiative

CMS is still navigating how to implement this payment structure while not alienating providers, and BPCI was an attempt to find a middle ground that is palatable to providers while capitalizing on the cost savings bundled payments offer payers.

Unfortunately, determining this middle ground has led to CMS sending conflicting messages to the industry. In late 2017, CMS rescinded rule changes that required mandatory bundled payments for providers to test the effect bundled payments would have on cardiac and orthopedic care. CMS noted that responses from providers to the mandatory bundled payments cited concerns over both the process by which costs for episodes were determined as well as the ability for smaller HCOs to comply with the process.

Despite these setbacks, CMS is not withdrawing support from bundled payments as a whole and has instead created the BPCI-Advanced, a voluntary iteration of BPCI with the same goal of aligning incentives among health care providers. Early adoption of the BCPI-Advanced program has been robust although it remains to be seen how many of these providers might exit early next year. Additionally, HHS Secretary Azar indicated last month that mandatory bundles are coming in the near future for radiation oncology and possibly other providers as alternative payment models.

Commercial payers have shown interest in bundled payments, but have been slow to introduce the practice. Although we have seen increased adoption from some payers, the general consensus is that these organizations will wait until the concept is proven before devoting resources to the change. We might have to wait until bundled payments are once again mandated by CMS before commercial payers adopt the model.

Provider Reservations

While the attitude of providers towards bundled payments could be best described as “wary,” there is still opportunity for healthcare providers to lower their costs while improving the standard of care. Yet, success with bundled payments requires close coordination between multiple providers over a varying timespan, something that many providers struggle with.

In order for bundled payments to work for both patient and provider, an HCO needs to have the ability to identify who is eligible for bundled payments early in the treatment cycle through monitoring and tracking. They also need to have a network and processes in place to engage affiliated and community providers that are necessary to the bundled payment process. Not surprisingly, many HCOs are hesitant to invest the organizational resources necessary to establish this level of collaboration.

Specialty physician groups that are only focused on engaging in one or two retrospective bundles will be able to change more rapidly but over the longer term, it will be harder for smaller HCOs to effectively scale bundled payments across multiple services lines within their organization. Another advantage larger systems have is systems and processes for dealing with post-acute care needs that are critical for succeeding in bundled payments.

In general, large HCOs with wide networks and established reporting and monitoring processes are better equipped to handle the transition to bundled payments and effectively scale these program although several specific factors (e.g., episode type, target price, exclusion criteria, risk adjustment) will affect how a provider performs.

The Tools for Bundled Payments

Our report focuses primarily on identifying the IT environment that supports, and will support, bundled payment plans. We were able to identify a number of key issues that software solutions must address, including patient tracking, care process redesign, and physician engagement. As of the writing of this report, no vendor offers a comprehensive solution to the myriad reporting and management challenges that bundled payments present.

We did identify commercially available solutions to deal with cost and quality reporting requirements inherent in the bundled payment process. Unfortunately, HCOs are going to have to develop piecemeal processes that incorporate multiple systems until vendors are able to provide a robust comprehensive solution. We expect that as bundled payments garner more support and interest, HIT vendors will recognize the market opportunity and develop systems to specifically address these issues.


The question is not whether bundled payments are going to see greater utilization, but rather to what extent will bundled payments affect healthcare payers and providers? Providers especially will need to have a plan and processes in place to reduce risk to their revenue streams as bundled payments become more ubiquitous.

Our report, Bundled Payments: Current Tools and Strategies, outlines how providers can navigate these changes and identifies IT solutions that may assist them. It provides detailed insight into what bundled payments are, how to execute them, and the challenges associated with their orchestration. Furthermore, it contains comprehensive vendor profiles and evaluations of the solutions they offer, which we hope will assist providers as they prepare for this transition.

On January 30, 2019, we are hosting a webinar on this topic. To attend or just be on the list for the recording, please click here to register.

Stay up to the minute.

Did You Know?

Revisiting Our 2018 Predictions

As is our custom here, we like to look back on our predictions for the closing year and see just how well we did. Some years we do amazingly well, others we over-reach and miss on quite a few. For 2018, we got seven of our 13 predictions spot-on, two were mixed results and four predictions failed to materialize. If we were a batter in the MLB we would have gotten the MVP award with a .538 batting average. But we are not and have to accept that some years our prediction average may hover just above the midpoint as it did this year.

Stay tuned, 2019 predictions will be released in about one week and it is our hope that they will inspire both rumination and conversation.

(Note: the bigger and plain text are the original predictions we made in 2017, while the italic text is our review of 2018). 

Merger & acquisition activity continues; Humana or Cigna acquired.

Major mergers and acquisitions that mark the end of 2017 (CVS-Aetna, Dignity Health-CHI and rumored Ascension-Providence) will spill over into 2018. Both Humana and Cigna will be in play, and one of them will be acquired or merged in 2018.

MISS – neither happened. However, Cigna did pick-up PBM service Express Scripts and rumors continue to swirl about a possible Humana-Walmart deal or more recently, even a Walgreens-Humana deal.


Retail health clinics grow rapidly, accounting for 5 percent of primary care encounters.

Hot on the health heels of CVS’ acquisition of Aetna, growth in retail health reignites, albeit off a low overall footprint. By end of 2018, retail health clinic locations will exceed 3,000 and account for ~5% of all primary care encounters; up from 1,800 and ~2%, respectively, in 2015.

MISS – Modest growth in 2018 for retail health clinics with an estimate of around ~2,100 by year’s end. Telehealth, which is seeing rapid growth and on-site clinics may be partially to blame.


Apple buys a telehealth vendor.

In a bid to one-up Samsung’s partnership with American Well, and in a bid to establish itself as the first tech giant to disrupt healthcare delivery, Apple will acquire a DTC telehealth vendor in 2018.

MISS – Apple continues to work on the periphery of care with a focus on driving adoption of its Health Records service in the near-term with a long-term goal of patient-directed and curated longitudinal health records.


Sixty percent of ACOs struggle to break even.

Despite investments in population health management (PHM) solutions, payers still struggle with legacy back-end systems that hinder timely delivery of actionable claims data to provider organizations. The best intentions for value-based care will flounder and 60% of ACOs will struggle to break even. ACO formation will continue to grow, albeit more slowly, to mid-single digits in 2018 to just under 1,100 nationwide (up from 923 as of March 2017).

HIT – MSSP performance data showed only 34% earned shared savings in 2017 (up from 31% in 2016) and by year’s end it is estimated there will be ~1,025 ACOs in operation.


Every major EHR vendor delivers some level of FHIR support, but write access has to wait until 2019.

While some of the major EHR vendors have announced support for write access sometime this year and will definitely deliver this support to their most sophisticated customers, broad-based use of write APIs will happen after 2018. HCOs will be wary about willy-nilly changes to the patient record until they see how the pioneers fare.

HIT FHIR-based read APIs are available from all of the major EHR vendors. Write APIs are still hard to find. To be fair, HCOs as a group are not loudly demanding write APIs.


Cloud deployment chips away at on-premises and vendor-hosted analytics.

True cloud-based deployments from name brand vendors such as AWS and Azure are in the minority today. But their price-performance advantages are undeniable to HIT vendors. Cerner will begin to incent its HealtheIntent customers to cloud host on AWS. Even Epic will dip its toes in the public cloud sometime in 2018, probably with some combination of Healthy Planet, Caboodle, and/or Kit.

HIT – adoption of cloud computing platforms is accelerating quickly across the healthcare landscape for virtually all applications. Cloud-hosted analytics is seeing particularly robust growth.


True condition management remains outside providers’ orbit.

Providers will continue to lag behind payers and self-insured employers in adopting condition management solutions. There are two key reasons why: In particular, CMS’s reluctance to reimburse virtual Diabetes Prevention Programs, and in general, the less than 5% uptake for the CMS chronic care management billing code. In doing so, providers risk further isolation from value-based efforts to improve outcomes while controlling costs.

HIT – Awareness of the CCM billing code (CPT code 99490) remains moderate among providers and adoption is still estimated at a paltry less than 15%.


Mobile-first becomes the dominant platform for over 75% of care management solutions.

Mobile accessibility is critical for dynamic care management, especially across the ambulatory sector. More than 75% of provider-focused care management vendors will have an integrated, proprietary mobile application for patients and caregivers by end of 2018. These mobile-enabled solutions will also facilitate collection of patient-reported outcome measures, with 50% of solutions offering this capability in 2018.

MIXED – While the majority of provider-focused care management vendors do have an integrated mobile application (proprietary or partnership), collecting PROMs is still a functionality that remains limited through an integrated mobile solution.


Solutions continue to document SDoH but don’t yet account for them.

A wide range of engagement, PHM, EHR, and care management solutions will make progress on documenting social determinants of health, but no more than 15% of solutions in 2018 will be able to automatically alter care plan interventions based on SDoH in 2018.

HIT – despite all the hoopla in the market about the need to address SDoH in care delivery, little has been done to date to directly affect dynamic care plans.


ONC defines enforcement rules for “data blocking,” but potential fines do little to change business dynamics that inhibit data liquidity.

The hard, iron core of this issue is uncertainty about its real impact. No one knows what percentage of patients or encounters are impacted when available data is rendered unavailable – intentionally or unintentionally. Data blocking definitely happens but most HCOs will rightly wonder about the federal government’s willingness to go after the blockers. The Office of the National Coordinator might actually make some rules, but there will be zero enforcement in 2018.

MIXED – Last December we said, “The hard iron core of this issue is uncertainty about its real impact.” Still true. Supposedly, rulemaking on information blocking is complete but held up in the OMB. The current administration does not believe in regulation. So “data blocking” may be defined but there was and will be no enforcement or fines this year.


PHM solution market sees modest growth of 5-7%.

Providers will pull back on aggressive plans to broadly adopt and deploy PHM solution suites, leading to lackluster growth in the PHM market of 5% to 7% in 2018. Instead, the focus will be on more narrow, specific, business-driven use cases, such as standing up an ACO. In response, provider-centric vendors will pivot to the payer market, which has a ready appetite for PHM solutions, especially those with robust clinical data management capabilities.

HIT – PHM remains a challenging market from both payment (at-risk value-based care still represents less than 5% of payments nationwide) and value (lack of clear metrics for return on investment) perspectives. All PHM vendors are now pursuing opportunities in the payer market, including EHR vendors.


In-workflow care gap reminders replace reports and dashboards as the primary way to help clinicians meet quality and utilization goals.

This is a case where the threat of alert fatigue is preferable to the reality of report fatigue. Gaps are important, and most clinicians want to address them, but not at the cost of voluminous dashboards or reports. A single care gap that is obvious to the clinician opening a chart is worth a thousand reports or dashboards. By the end of 2018, reports and dashboards will no longer be delivered to front-line clinicians except upon request.

MISS – Reports and dashboards are alive and well across the industry and remain the primary way to inform front-line clinicians about care gaps.


At least two dozen companies gain FDA-approval of products using machine learning in clinical decision support, up from half a dozen in 2017.

Arterys, Quantitative Insights, Butterfly Network, Zebra Medical Vision, EnsoData, and iCAD all received FDA approval for their AI-based solutions in 2017. This is just the start of AI’s future impact in radiology. Pioneer approvals in 2017 — such as Quantitative Insights’ QuantX Advanced breast CADx software and Arterys’s medical imaging platform — will be joined by many more in 2018 as vendors look to leverage the powerful abilities of AI/ML to reduce labor costs and improve outcomes dependent on digital image analysis.

HIT – With about a month left in 2018 the count of FDA approved algorithms year to date is approaching 30 and could potentially hit three dozen by year end. This is a significant ramp up in the regulatory pipeline, but more is needed in the way of clear guidance on how they plan to review continuously learning systems and best practices for leveraging real-world evidence in algorithm training and validation.


What do you think of 2018 for health IT?

Key Takeaway

  • PHM products are maturing in spite of uncertainty about payment system.

The Chilmark Research 2018 Population Health Management Market Trends Report, long in development, will be released immediately before HIMSS in March. This report profiles 25 vendors and describes the technology landscape for enabling a population health management (PHM) strategy.

Why a PHM Market Trends Report Now?
We hesitated to release a report on this emerging market for several years. Until recently, most available solutions were not able to fully address the range of provider requirements for PHM. The earliest solutions focused on the needs of Healthcare Organizations (HCOs) caring for Medicare Shared Savings Program (MSSP) patient panels. Over time, vendors added functionality to support bundles and private payer requirements requiring a good understanding of quality, costs, and utilization.

Another reason we held off with this report had to do with provider readiness. Healthcare delivery organizations needed time to incorporate these capabilities into their processes and workflows. The earliest HCO adopters of PHM relied on a variety of manual processes to conduct their PHM programs. Most HCOs lacked extensive experience with one or more of the constituent functional domains of PHM to fully utilize and benefit from the technology.

By early 2018 vendors had amassed significant experience building, managing, and supporting PHM enabling technology for providers and payers. Virtually all HCOs realize that PHM will be an increasingly important part of their operations and influence a significant percentage of their future revenue streams.

Virtually all HCOs realize that PHM will be an increasingly important part of their operations and influence a significant percentage of their future revenue streams.

Uncertainty About Value-Based Healthcare Makes Providers Pause
PHM’s close association with value-based care and payments cements its reputation as both a key strategy and technology enabler for transforming the U.S. healthcare system to achieve the goals of the Triple Aim. The PHM market’s growth closely mirrors the growth in value-based reimbursement (VBR). The pace of transformation to the payment system has not been smooth, and the Centers for Medicare and Medicaid Services (CMS) has sent mixed signals about its future in 2017. The business mandate for providers to embrace PHM slowed in the last 12-18 months. Provider concerns about revenue or market share losses have dampened enthusiasm for changing the fee-for-service (FFS) status quo. But the overall trend is moving in one direction: Away from FFS.

While uncertainty about the fate of value-based payments restrained provider’s embrace of PHM, the number of accountable care organizations (ACO), clinically integrated networks (CIN), and other risk-bearing programs continues to grow. Providers of all sizes have come to terms with the inevitable move to value-based contracting. ACOs will serve 10.5 million Medicare patients this year, a 17% increase over 2017. Delivering care to this expanding panel of patients requires providers, and in particular primary care providers, to organize themselves to make their PHM efforts successful. A variety of community based organizations, such as regional or state-level health information exchange organizations and to some extent payers, are also beginning to see the need to build and run PHM programs for, or in concert with, their provider partners.

Evolving Perception of PHM and the Four Technology Domains
PHM means different things to different people in 2018. Vendors built on products for pay-for-performance (P4P) programs to support CMS’ original set of ACO programs. Vendors, as a result of both organic development and acquisitions, now offer more PHM related functionality then they did a few years ago. While it is too early to say that PHM requires an established and fixed set of capabilities, the general outlines of the technology to enable a PHM strategy are broadly understood to fall into four technology domains:

  • Analytics
  • Care management
  • Patient engagement
  • Data aggregation

Most of the vendors in this report have special expertise with one or a few of these domains.

As recently as a few years ago, analytics products provided the key enabling function for most PHM programs. While this functionality has an indispensable role in PHM programs, its core functionality – cost and utilization analytics and clinical quality monitoring – is arguably the most mature aspect of existing PHM solutions. Attention has shifted somewhat to care management. The value proposition for care management stems from a perception that these workflows are the “tip of the spear” for PHM generally. Care management products are often the central tool for organizing and running PHM programs on a day-to-day basis. Payer-oriented solutions with case, utilization, and/or disease management legacy have transferable skills for clinically oriented PHM. These vendors are beginning to make inroads into provider markets. Care management capabilities are less mature than analytics but are undergoing the most rapid pace of change by vendors.

The least mature aspect of PHM from a functional standpoint is patient engagement. In most of the solutions described in this report, the care management product supports some level of interaction between patients and a care team, mostly relying on a patient portal or app. Telephonic interaction with patients still seems to be the dominant method for most providers.

Data aggregation and data source management are core competencies for PHM. They form the foundation for all of the other domains of PHM. Managing diverse data sources is complex in all PHM sub-markets and for every organization developing PHM programs. Transactions, messages, documents, and files flow in from different organizations. These sources need to be reconciled, deduped, monitored for quality, and have all of their various records matched to patients, providers, organizations, health plans, and contracts. Organizations express this data using a multitude of formats and vocabularies. Vendors must constantly monitor these transfers and streams for quality, timeliness, and completeness. Every vendor in this report has skills in this regard but they differ in the scale at which they can operate. The number of organizations and sources from which they can ingest and process data is shaping up to be an important differentiator for providers. This set of capabilities is marked by fairly mature technologies and techniques but they are being deployed against a rapidly expanding universe of health-related information.

EHR Vendors Do Not Own the PHM Market
No vendor today has anything like a “PHM Platform.” The largest EHR vendors aspire to develop such an offering and have the resources to pull it off. Hospitals and health system turn to these vendors for all of their PHM needs, but it is not unusual for them to assemble their own solution from a variety of vendors supplemented with internally developed capabilities.

But these offerings come with price tags with little appeal outside of the large HCOs. Independent physician practices, most with limited budgets and no significant IT development staffs, are more interested in turnkey capabilities from a single vendor. Often this means their EHR vendor, but just as often it means an independent vendor with a full range of PHM capabilities. While EHR vendors are fielding increasingly full-featured solutions, they have not cornered the market.


Bottom Line
Not all providers and payers have fully embraced value-based care and payments but the need for, and interest in, enabling solutions for PHM continues to grow. Armed with this report, providers can distinguish between the capabilities and services needed to help them meet their complex information and workflow needs for multi-disciplinary, multi-organizational teams striving to optimize the health of populations. This report will help providers sort through the different vendors and solutions in this confusing market.

Cerner Impressions: Beginning Signs of PHM Maturation

Two weeks ago, we attended the 2017 Cerner Collaboration Forum, which combined the Population Health Summit with three other annual events (Ambulatory Summit, CareAware Summit, and Cerner Physician Community). This larger single summit resulted in a broader representation of provider organizations and other attendee. The “power” of combining these various events also reflects the growing convergence of technologies, workflows, and practices that are necessary as providers, payers, and other stakeholders further shift to valued-based care.

Here are four key impressions of the event.

PHM presentations have matured. The client population health management (PHM) presentations employed a case study approach and included results from deploying various HealtheIntent solutions. This was a change from the past two years, which focused more on implementation issues and presented limited utilization and outcomes data. Early adopters of HealtheIntent now have two or three years of experience using some of the solutions (HealtheRegistries, HealtheCare) and have started to really focus on operational and tactical-related issues, ranging from integration with transition management processes to population health maintenance to care team workflows.

Starting a provider-owned health plan is not for the meek. Bill Copeland from Deloitte Consulting spoke about research on 224 provider-owned plans with more than $1 billion in annual revenues. Deloitte has identified four success factors for these types of plans.

Core line of business. It is a significant percentage of their overall payer mix and the HCO has lengthy experience in treating those patients prior to enrolling them in a provider-owned health plan.
Tenure. The 10 most profitable plans were all more than years old.
Scale. Plans need more than 100,000 members in order to have an adequate risk pool.
Market Share. In their market, they rank at least second or third in market share, with the ability to buy services out of network at reasonable costs.

What really caught my attention was that it took a minimum of five years for a new provider-owned health plan to become profitable, with significant losses realized in the first two or three years. This should them significant pause to health systems with constrained cash flows.

Provider demand for APIs is strong, but they have questions. A half-day event focused on FHIR and APIs preceded the summit. Provider interest is strong – Cerner has more than 1,100 applications in its sandbox, and this number is increasing rapidly – but a few key questions remain.

Security or convenience? Which of these two attribute will patients demand more of, and what tradeoffs are they willing to make in the process?
Vendor role? Providers and potentially patients need more guidance and intelligence on the information brought in via APIs especially in regards to the variety and veracity of the data. Using this data to provide analytic insights is still a bit down the road.
Increasing utility? Providers ultimately want API-supplied information put into their flow charts/templates within their EMR and where else appropriate, with little manual intervention.
Who regulates? There’s a large degree of ambiguity at the federal level as to which agency or agencies (FDA, FTC, HHS, etc.) will regulate privacy, security and competition-related issues. This has caused some hesitation among providers and vendors.

Health IT is an enabler, but more is needed for community-level change. A panel on Healthy Nevada, a five-year partnership between Cerner and the city of Nevada, Mo., discussed the lessons learned and impact of the partnership.

Since 2012, Vernon County has moved from 88 to 60 in Missouri’s county health rankings (as updated annually by the Robert Wood Johnson Foundation). HealtheIntent gives the community a single source of community-wide data and access to real-time public health information, which is used to segment the population and begin to employ ‘hot-spotting’ interventions.

What struck me during the panel and in a few conversations I had afterward, though, was that, despite the desire to connect healthy lifestyles, creating a public health or health system-led program simply will not work without broader engagement with various civic organizations, especially in rural areas or among certain population segments. Cerner and a number of other vendors are starting to place a greater emphasis on consumer and caregiver engagement functionality – but as our recent Care Management Market Trends Report suggests, there is much progress to be made.

Will small providers be left behind? This year’s Cerner Collaboration Forum marked the beginning of a maturation of provider attendees who have been on the HealtheIntent platform (HealtheRecord, HealtheRegistries, HealtheCare) for a few years now. Early adopters are moving away from implementation-related issues and starting to fine-tune how these solutions support specific care management and care coordination use cases and workflows.

Combining all the events in a single one also provided a broader scope of attendees. We received feedback from a wider array of providers, including smaller customers who still have not made a substantial PHM investment or others who were reevaluating earlier investments in point solutions and looking for a more comprehensive “go forward” data strategy and IT investment.

The question is whether most small to midsize providers are willing and able to make the necessary PHM investments including in Health IT moving ahead forward. The Cerner event did not really cover this topic and there are mixed signals in the market place right now about this market segment right now including when PHM buying activity may begin to pick up in earnest.

Medical Professionalism Trumps Health IT in Coordinating Care

As I sat in the Reading (Penn.) Health System ER late Friday night, I had a lot of time to reflect on the research I have been doing lately on care coordination. In particular, I pondered how what I have heard and seen among many demos the past several months compared to the state of care coordination my mother had received earlier in the day and was receiving at that very moment – all this amid the constant cacophony of chirps and beeps emitted from the controlled chaos in the ER that night.

The events that brought my mother to the ER had occurred several hours earlier. Right before 5 p.m., my father called to say my mother had been experiencing severe nausea with vomiting and diarrhea since earlier that afternoon. In the past hour, she had been unable to even keep down electrolyte-infused water.

For most people, the common recourse is to take a multi-symptom OTC drug such as Loperamide, lie down, and try to sleep as this stomach bug worked its way through their system. But my mother has a chronic kidney disease with a severely impaired renal clearance rate (RCF), so this simply was not an option. Severe dehydration risked spiking her already elevated protein levels and possibly causing further kidney damage, which she could ill afford.

Before calling me, though, my father had called my mother’s nephrologist at Penn Medicine. He had already left for the day, but my father reached him on his personal cell phone number. The nephrologist had given this information to my mother several months ago, along with his home number and personal email address. This certainly was not a standing practice or policy for Penn Medicine, nor was it something that other physicians at Penn had done for my mother over the past several years. It was simply due his own sense of professionalism and obligation in the doctor-patient relationship.

The nephrologist said my mother needed to be seen immediately at the nearest ER, started on an IV to rehydrate her, and given additional medications to stop her vomiting and diarrhea as necessary. He also told my father to provide his contact information as soon as my mother arrived at the ER; the nephrologist wanted to further explain the situation and speak to the attending physician, regardless of the hour.

I drove to Reading, picked up my mother, and went to the ER. After we went through security, we were met by a long line to even submit her name. Unfortunately, Reading has one of the highest rates of poverty among U.S. cities, and this manifests itself in a high rate of uninsured people who often end up in the ER. On a busier-than-normal Friday night, the estimated weight time exceeded 3 hours.

I tried explaining my mother’s situation to the admissions desk, as well as her physician’s instructions to be seen immediately. However, since my mother was not experiencing chest pains or severe trauma, she was told to wait. At this point, I called my mother’s nephrologist, who demanded to speak with the admission desk staff. While all this was occurring, my mother proceeded threw up in a bag she had brought with her.

That, along with the nephrologist’s conversation with an attending nurse at the front desk, thankfully got my mother processed nearly immediately. She had her basic information verified and her vitals taken. Then she was moved to a transfer bed close to a restroom, where staffed started an IV, gave her anti-diarrhea and anti-nausea medications, and took her blood to start lab work.

Within a few hours, my mother was in a formal ER bed and we were finally able to speak with an attending overnight ER physician (an internist). He explained the results of the blood work, reviewed my mother’s recent medical history, and discussed the next steps, which included admitting her to ensure she only had a stomach bug and not a bout of diverticulitis or c. diff. The attending ER physician had also heard from my mother’s nephrologist, who wanted to discuss her case before she was admitted or given any additional further medical treatment. He said they talked for nearly 25 minutes. I was really surprised to hear that my mother’s nephrologist had been willing to discuss her case with this attending physician at 11 p.m. on a Friday night.

Care Coordination & Health IT shortcomings

While technology, especially mobile phones, played a vital role in coordinating care for my mother Friday evening and ensuring she got the proper care she needed in a timely manner, almost none of it came from health IT solutions. Even medication reconciliation had been largely facilitated by a copy of my mother’s medication list from her MyPennMedicine record (an Epic MyChart application) that I printed before we went to the ER. I also had brought along her pills and ledger notebook where she notates what she takes, just in case the printed list was missing something.

The glaringly evident limitations of the health IT solutions I witnessed Friday evening have been discussed ad nauseum, including the lack of interoperability of EHR systems and the inability of patients to access and easily share their medical history as necessary. (See the Table below.)

Care Coordination Issue

What really struck me before I left the hospital at close to 1 a.m. was that, despite all of the talk about the need to better coordinate care through the use of various care teams and longitudinal care plans, it really was the dogged persistence and professionalism beyond any normal expectation from my mother’s nephrologist that enabled her to get the care she needed. For that I was incredibly grateful — but also a bit dismayed, as massive investments in health IT the past several years did so little to coordinate the care my mother needed that evening.

Making the Most of the CCM Code

Challenges of Billing

One of the most buzz worthy topics at the recent HIMSS conference was CMS’ new CPT code for chronic care management (CCM). The code will pay providers and care teams $43 PMPM for the non-face-to-face time they spend managing complex, chronically ill patients’ health. Scaled across patient panels and office practices, this represents no small amount of potential new revenue. Yet, the billing requirements accompanying the new payments are complex and comprehensive, with considerable implications for workflow, documentation, IT customization, patient engagement, and more. This month’s domain monitor provides a high level outline of the new CCM code, a breakdown of the major challenges practices face in billing for it, and some early signs of how the health IT industry is responding to the opportunity with new solution capabilities.

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Inside Peek at Forthcoming PHM Report

imagesOver 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.

Looking Ahead
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.







The Automation and Horizontal-ization of Care Management


Truly innovative approaches to care management automation are rare, and the market is currently fixated on emulating existing, high-touch care management workflow with IT. Getting to the state of care management utopia depicted in Figure 1 will be a long road, chock full of hurdles.

In the meantime, HIT categories that enable care management business processes are all over the map, including:

1. Content-heavy Care Management Workflow Tools
2. Clinical analytics systems that generate lists of high risk patients
3. Clinical Care Management Best of Breed
4. HIE+Analytics Alerts

Within these categories, the trend is that traditional silo-ed care management processes are turning “horizontal” or, driven by an integrated data store. This is a first, necessary step towards automation.

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