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?

Stay up to the minute.

Did You Know?

Cerner Health Conference 2018: Interest in PHM Solutions Remain ‘Healthe’

By Matt Guldin and John Moore

Recently, we and 12,000+ others attended the Cerner Health Conference 2018, where the theme was “Smarter Care.” Overall, the event focused on building on top of the EHR, while much of the floor space and conversations focused on population health and revenue cycle.

Cerner Smarter Care CHC18

Key Takeaways

  • New CEO, Brent Shafer, is not the visionary that Neal Patterson was, but he is highly focused on customer success and operations. Expect Cerner to become more acquisitive (Lumeris) and pursue partnerships such as that with Salesforce.
  • Rising client interest in population health management (PHM) solutions – Cerner’s HealtheIntent platform – but uncertain timeframe as to when these solutions will truly scale across client base.
  • The event reinforced our view that Cerner is well positioned to capture a growing wallet share from its hospital & health system customers over time as well as adding new potential customers (e.g., payers, state Medicaid agencies, self-insured employers) via its HealtheIntent platform.

HealtheIntent platform

For several years now, Cerner has been focusing on moving beyond the EHR with its HealtheIntent PHM platform. At CHC18, Cerner was doubling down on this bet with the message “Smarter Care” with numerous sessions and a significant amount of exhibit space dedicated to this theme and platform. Today, Cerner has signed ~160 clients of which ~90 are currently live.

HealtheIntent is well positioned as an EHR agnostic solution that will give Cerner the ability to invest resources into developing solutions that think beyond the hyper-competitive zero-sum game of EHR contracts. Two major flagship HealtheIntent customers are also two major Epic customers (Advocate and Geisinger) and there is a clear opportunity to work with these customers to better integrate Cerner’s evolving platform with Epic’s similarly expanding universe of products.

A key challenge for any PHM vendor is developing strong services capabilities to assist clients in extracting the highest value from their PHM solution deployments. In August, Cerner made a significant investment in Lumeris, a company with a strong services offering that Cerner will leverage.

Integration with Salesforce provides Cerner with a strong competitive advantage

In line with the company’s shift toward consumer-focused healthcare, Cerner is partnering with Salesforce to offer providers an integrated patient engagement solution. Through this partnership, HealtheIntent data, which is collected from numerous sources, will feed directly into Salesforce’s Health Cloud.

Once the data is in Health Cloud, from within their EHR a clinician can quickly identify patient populations based on various criteria via a queried search. Once identified, a campaign can be initiated. Cerner plans to launch this product in 2019, and will be the only EHR company to have Salesforce directly embedded in its EHR and HealtheIntent workflows.

Revenue cycle still in flux

Cerner understands the importance of getting revenue cycle (billing) software right. Cerner has penetrated, to varying degrees, about 40% of its hospital clients with billing software, but those are mostly small facilities. Cerner’s software still appears visually outdated and lacking functionality, particularly for ambulatory practices.

One need only walk through the CHC18 exhibit area of third-party software vendors to see the demand for RCM solutions that work in the Cerner environment. Roughly 40 percent of all vendors were RCM vendors. Clearly, Cerner is missing out on fully capitalizing on this opportunity.

RevWorks interest robust, ITWorks continues to grow

Cerner is seeing strong demand for its RevWorks offering among smaller hospitals, and the firm is still hiring aggressively to support growth into 2019. Cerner has about 100 RevWorks clients, compared to 30-35 two years ago. One of the main reasons for Cerner’s early success in outsourced revenue cycle solutions is that the product comes with a demonstrable return on investment for clients with specific targets outlined before any deal is signed.

The ITWorks business is growing but acquiring clients at a slower pace than RevWorks.

DoD/VA

Now that MHS Genesis is up and running across the first wave of an initial 4 sites, the company took important lessons learned for future Department of Defense (DoD) rollouts as well as Veteran Affairs (VA) deployments. Cerner noted that the VA is not yet in the implementation phase as it is currently planning the largest install in the industry’s history.

Of these two massive installs, the one at the VA bears watching closely. A significant portion of veterans receive their care via Tricare (local healthcare providers under contract to VA). How Cerner drives interoperability across multiple venues of care nationwide, the potential role of HealtheIntent, the embedding of telehealth functionality and the list goes on will all be pressure-tested by the VA. The results of that pressure-testing will, in time, roll out to the broader Cerner client base.

“Where the company has truly led the EHR market is with HealtheIntent. Rather than a walled-garden approach, Cerner’s HealtheIntent is architected for a more open future and its capabilities continue to expand even though market has been tepid. Cerner accurately saw the future and invested early for the inevitable move to value based care.”

Looking Forward

Cerner has been an innovative company since its founding. While not all innovations have been a success (much to some clients’ chagrin), the company has nonetheless made progress and continues to push forward. Their ambulatory EHR is gaining significant traction with larger IDN clients, and RCMwhile not there yetis closing the gap with competing solutions.

Where the company has truly led the EHR market is with HealtheIntent. Rather than a walled-garden approach, Cerner’s HealtheIntent is architected for a more open future and its capabilities continue to expand even though the market has been tepid. Cerner accurately saw the future and invested early for the inevitable move to value-based care.

Visionary leadership made Cerner what it is today. Hopefully, the company’s new leadership fully appreciates this key attribute. Only time will tell if the future focus of Cerner is operational efficiency at the expense of vision. While operational improvements are common in a maturing market, our hope is that Cerner continues to look beyond the near term.

The Growing Role of Social Determinants Data in Healthcare

By Paul Nardone, 2018 Research Intern

Key Takeaways:

  • Healthcare stakeholders recognize a social determinant of health when they see it, but organizations differ on which measures are important. Agreement about a core set of SDoH would help implementers better utilize this data type.
  • SDoH and patient health are correlated, but determining causality remains challenging. Lack of knowledge about causality hampers providers’ ability to translate SDoH data into effective interventions.
  • Leading public health stakeholders are using SDoH to fund organizations not traditionally involved in healthcare delivery to improve social drivers of cost.
  • Data brokers are selling SDoH data. Widespread usage by payers and providers, coupled with interest from social media giants, could trigger increased market and regulatory scrutiny.

Marshalling aggregated EHR and claims data for use in applications is an ongoing challenge for most healthcare enterprises. Social determinants of health (SDoH) are a relatively new and amorphous data type that show great promise for contributing to a range of applications.

As healthcare shifts from volume to value, SDoH present opportunities at both population and individual levels. Patient cohort discovery in PHM programs could become more precise and accurate using relevant SDoH. SDoH offers the potential to “better predict potential healthcare outcomes across disparate populations.”

Implementers will need more experience with [SDoH] data before it becomes a routine inclusion in HIT applications. Otherwise, SDoH risk becoming just another unruly data source.

Providers and payers hope to achieve a better understanding of risk, better patient engagement, and more effective use of existing treatment resources. Questions remain about what qualifies as a SDoH, where to source such data, and how to use it. More experience will be needed before SDoH delivers broad-based benefits at both a patient and population level.

What is a Social Determinant of Health?

The CDC defined SDoH as “conditions in the environments in which people are born, live, learn, work, play, worship, and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks.” While most organizations generally agree with this definition, different organizations report drastically different measures as important to health status.

A quick look at existing lists of SDoH confirms that there is no consistent, widespread acceptance for a single set of factors. For instance, the Kaiser Family Foundation reports 48 social determinants related to individual health, ranging from years of schooling to access to a full-service grocery store. Meanwhile, LexisNexis offers 442 measures that relate to patient health.

No governmental or commercial authority has established a definitive list with strong industry support. The CDC, Canadian government, and WHO have all produced reports outlining their take on which SDoH should be tracked, accompanied simply by policy and practice recommendations. For now, providers and payers are bombarded with different views of the sources, uses, and value of SDoH. Agreement on which SDoH are important would help implementers understand how and where to use this relatively new data type.

How Do SDoH Relate to Patient Health?

Despite uncertainty about which SDoH are relevant, many stakeholders believe that SDoH can help improve population and patient health. However, while most people accept that there is a correlation between SDoH and health outcomes, determining causality between specific kinds of SDoH and specific health outcomes remains challenging.

The correlation between an individual’s years of schooling completed and their probability of smoking provides a perfect example. While more years of education correlate to a lower probability of smoking, more education does not cause anyone to smoke less, and smoking does not cause anyone to drop out of school. Research shows that the differences in smoking behavior at age 24 are accounted for by differences in smoking behavior at age 17, implying that some third factor drives both the probability of smoking and the years of completed education. As a result, interventions intended to decrease the probability of smoking by increasing the years of education an individual completes would be ineffective.

While providers accept that SDoH are often correlated to health outcomes, lack of knowledge about causality hampers efforts to translate those correlations into effective interventions. In addition, SDoH data is not guaranteed to contribute in all contexts. A 2017 study showed that using SDoH does not enhance predictions about a patient’s need for social services beyond what EHR and claims data already provide. Implementers could use guidance on whether certain kinds of SDoH enhance an application.

SDoH Contributions to Public Health

SDoH is connecting healthcare stakeholders with organizations not previously thought of as directly involved in healthcare delivery. For example, after determining that better access to fresh produce, stable housing, and preventive screenings improves patients’ health, UnitedHealthcare awarded $1.95 million to organizations that could help. One recipient, Feeding Wisconsin, used the funds to expand support for local food banks.

Both the U.S. and Canadian governments have initiatives that mirror what UnitedHealthcare has done, but on a national level. Canada’s budget document, Growing The Middle Class, “detailed an unprecedented investment of $8.4 billion over five years in housing, education and child welfare for Indigenous peoples, and $2 billion to end longstanding boil-water advisories on reserves,” specifically citing SDoH as a reason for the investment. The U.S. initiative, Healthy People 2020, seeks to address SDoH by promoting economic stability, education, social and community context, health access and education, and built environment through funding provided by the Office of Disease Prevention and Health Promotion. These large initiatives fund smaller groups and programs that already have traction in addressing SDoH.

Accessing Relevant Social Determinants Data

Sourcing relevant SDoH data requires payers and providers to engage in a different process from the collection of traditional health data. In recent years, data brokers such as LexisNexis, Experian, and Axciom have been controversially selling SDoH data derived from a variety of consumer data sources. These companies collect vast amounts of data and create patient “health scores” similar to credit scores. Using these health scores, payers and providers can identify at-risk populations and prescribe personalized treatment options for individual patients.

Consumer understanding of the existence of this data remains low. SDoH data has not historically been considered directly pertinent to healthcare and is not subject to HIPAA. The recent usage could trigger more market or regulatory scrutiny of SDoH.

The number and variety of organizations offering social determinant data is increasing. The social media giants have an interest in further monetizing the data they have collected. Absent evidence that such data helps providers to make more informed decisions about patient health, market acceptance is not assured.

 

Ultimately, the interest level and desire to leverage SDoH in health IT is increasing rapidly. HIT vendors are responding slowly by including this data type in different products, but still in narrowly defined ways. Wider availability of a variety of SDoH is also fueling interest and experimentation. Incorporating SDoH into existing stores of EHR and claims data at the patient or cohort level introduces another layer of complexity for developers. Implementers will need more experience with this data before it becomes a routine inclusion in HIT applications. Otherwise, SDoH risk becoming just another unruly data source.

Opening New Front Doors to Care: Reflections From Bridge to Pop Health East

Bridge To Pop Health logoFor all the promise of patient engagement technology such as chatbots, wearables, self-management apps, and passive sensors, engagement is still a high-touch process. But just because cutting-edge technology isn’t part of the everyday workflow doesn’t mean engagement hasn’t been moving forward.

As our recent Population Health Management Market Trends Report concluded, technology adoption is most advanced in PHM’s early stages (risk stratification) and later stages (performance analysis). Producing generic care plans and determining outcomes and goals is mostly automated, though personalizing plans tends to require human intervention.

Engagement often happens the old-fashioned way – in person – whether in a clinical setting, the patient’s home, or an outpatient facility. This is especially true for high-risk and high-acuity patients with a complex set of social determinants of health (SDoH) that inhibit access to care. When interventions don’t take place in person, they often happen over the phone – the speaking-into-a-receiver part, that is, and not the sending-a-text, using-an-app, or watching-a-video parts.

The Bridge to Pop Health East conference in Boston, with a heavy emphasis on strategies and tactics for healthcare providers, reinforced many of our conclusions about technology adoption in PHM workflows. The most mature case studies focused on the use of analytics for patient identification and program assessment. This is hardly surprising. PHM tends to be closely tied to value-based care initiatives that penalize providers for poor performance, so targeting the patients who are most likely to get better is a sound business decision. Engagement matters – but engagement with the right patients matters more.

Modest progress in using technology to improve patient engagement does not necessarily mean that population health management initiatives continue to approach engagement the same old way.

As a result, the examples of digitized patient engagement that did emerge from the conference were a bit closer to “fax machine” than “Star Trek tricorder” on the innovation continuum – though, to be fair, they did come with measurable outcomes.

  • Atrius Health gives patients tablets to complete behavioral health screenings in the waiting room prior to appointments. Screening data is then available in the EHR, both at the point of care and for retrospective analysis – Atrius collected 75,000 data points in 2017.
  • Sutter Health applied behavior change principles to its email and SMS messages that encourage patients to schedule appointments for wellness visits or preventive services rather than wait for the office to reach out. The system saw a fourfold increase in self-scheduled appointments, saving $4 in administrative costs each time.
  • HealthEast Care System automatically enrolled total joint replacement patients in an email- and SMS-based educational program that covered topics such as pre-surgery preparation (fasting and medication use, for example) and post-surgery recovery. Day-of-surgery cancellations dropped, as did readmissions; length of stay was shorter, too.
  • Mercy Virtual Health saw a 500% decrease in the annual costs associated with treating a high-risk cohort of 1,000 patients by shifting from inpatient care to a combination of onsite and remote patient monitoring.

Open DoorProviding more “front doors to care”

That said, modest progress in using technology to improve patient engagement does not necessarily mean that PHM initiatives continue to approach engagement the same old way.

Three years ago, we opined that healthcare is bad at engagement because it is bad at engagement, not because it lacks technology solutions that make patients want to engage. Part of the reason (which we admittedly did not articulate at the time) was that traditional healthcare systems offer only one “front door to care” – a door that, when opened, often leads to a seat in a waiting room seemingly designed to make you forget how long you will have to be there before you actually receive care. (Why else is there a pile of magazines and an HD TV?)

Over the last three years, new front doors to care have opened (or been opened further): Retail health, urgent care, telehealth, kiosks, employer-sponsored clinics, monitoring apps and devices, virtual assistants, and even the occasional drone. This broadens patients’ access to care. It also challenges traditional provider organizations to improve patient engagement – or risk losing market share and revenue.

To extend a metaphor, Bridge to Pop Health East also provided examples of new provider-based care team members knocking at the door of the patient’s home.

  • Sending paramedics on home visits in rural or underserved areas where visiting nurses or home health professionals are in short supply.
  • Referring recently hospitalized patients to a standalone community clinic that focuses predominantly on SDoH such as housing and food assistance.
  • Embedding community health workers in neighborhoods, not hospitals, to boost their visibility as well as expose them to common care gaps or other service needs.
  • Partnering with logistics firms to deliver and set up durable medical equipment in a patient’s home, allowing home health professionals to focus more on care delivery.

Moving further, informal conversations at the conference alluded to a host of non-clinical services: Rideshare, meal delivery, home repair (to address fall risks or ventilation concerns) – even housekeeping and landscaping. This points to the importance of accomplishing tasks and alleviating burdens that prevent patients from doing anything but focus on their health and wellness.

As providers move forward with PHM, they are taking a long, hard look at patient engagement. Much of the movement so far has been high-touch, essentially replicating traditional inpatient workflows in the outpatient or home setting.

The new care team roles don’t come with the same educational and licensure requirements as nurses and doctors, and healthcare continues to add jobs, but this growth will be hard to sustain. To be blunt, healthcare systems will no longer be able to throw people at the problem.

When this tipping point comes, forward-thinking PHM programs – those that open community clinics, allow paramedics to conduct home visits, and recommend a handyman to recent surgery patients – will start to turn to the technology that will further empower patients opening the new front doors to care and staff answering those doors. And then the virtual assistants, sensors, and robots will take their place in patient engagement workflows.

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.

Cerner’s HealtheIntent Gaining Significant Traction

Moving Forward

Cerner’s annual user conference (CHC) last week gave us an opportunity to speak with Cerner executives and customers to gain insight on their current and future initiatives.

Take-aways:
> HealtheIntent is gaining momentum and displacing or overlaying competitors.
> Strong pent-up demand for the HealtheIntent EDW.
> Sales are strategic and typically occur a level above CIO.

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The Unraveling of Alere

Future Plans

Early last week, Optum announced that it would buy Alere’s health management business in a $600M cash deal. With this spin-out, the vision of Ron Zwanziger – Alere’s founder and former CEO – to create a comprehensive PHM platform that extended from devices, through IT infrastructure and care management services has come to an end.

This announcement has three implications for the market at large:

1. The market is simply not ready to sole-source such a significant, complete PHM platform from any one vendor. There are too many moving pieces, too many legacy apps, services and tools already adopted and many question marks remain as to just how big PHM will become to make such a big bet this early.

2. Vision is great, but being able to effectively execute on today’s more mundane market needs is critical to keep investors from getting overly anxious and involved.

3. Optum continues to effectively use the cash spill-over from UHG to remain acquisitive. While this acquisition will likely see more internal business from UHG than outside, Optum continues to aggressively build out its portfolio and more acquisitions are assured.

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