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Measuring Population Health ROI Is Still Tricky

Posted on May 24, 2017 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Over the past few years, health systems have made massive investments in population health management technology. Given the forces driving the investments are still present – or even closer at hand – there’s every reason to believe that they will continue.

That being said, health leaders are beginning to ask more questions about what they’re getting in return.  While systems may have subjected the initial investments to less scrutiny than usual, having accepted that they were critically necessary, many of these organizations are now trying to figure out what kind of return on investment they can expect to realize. In the process, some are finding out that even deciding what to measure is still somewhat tricky.

Many healthcare organizations started out with a sense that while investment returns on pop health management tech would take a while, they were in the knowable future. For example, according to a KPMG survey conducted in early 2015, 20 percent of respondents believed that returns on their investment in population health IT would materialize in one to two years, 36 percent expected to see ROI in three to four years and 29 percent were looking at a five+ year horizon.

At the time, though, many of the execs answering the survey questions were just getting started with pop health. Thirty-eight percent said their population health management capabilities were elementary-stage, 23 percent said they were in their infancy and 15 percent said such capabilities were non-existent, KPMG reported.

Since then, health systems and hospitals have found that measuring – much less realizing – returns generated by these investments can be complicated and uncertain. According to Dennis Weaver, MD, a senior consultant with the Advisory Board, one mistake many organizations make is evaluating ROI based solely on whether they’re doing well in their managed care contracts.

“They are trying to pay for all of the investment – the technology, care managers, operational changes, medical homes—all with the accountable payment bucket,” said Weaver, who spoke with Healthcare Informatics.

Other factors to consider

Dr. Weaver argues that healthcare organizations should take at least two other factors into account when evaluating pop health ROI, specifically reduction of leakage and unwarranted care variation. For example, cutting down on leakage – having patients go out of network – offers a 7 to 10 times greater revenue opportunity than meeting accountable care goals. Meanwhile, by reducing unwarranted variations in care and improving outcomes, organizations can see a 5 percent to 10 percent margin improvement, Weaver told the publication.

Of course, no one approach will hold true for every organization.  Bobbie Brown, senior vice president with HealthCatalyst, suggests taking a big-picture approach and drilling down into how specific technologies net out financially.

She recommends that health organizations start the investment analysis with broad strategic questions like “Does this investment help us grow?” and “Are we balancing risk and reward?” She also proposes that health leaders create a matrix which compares the cost/benefit ratio for individual components of the planned pop health program, such as remote monitoring and care management. Sometimes, putting things into a matrix makes it clear which approaches are likely to pay off, she notes.

Over time, it seems likely that healthcare leaders will probably come to a consensus on what elements to measure when sizing up their pop health investments, as with virtually every other major HIT expense. But in the interim, it seems that figuring out where to look for ROI is going to take more work.

Population Health Tech Will Lag Until Standards Emerge

Posted on June 22, 2016 I Written By

Anne Zieger is veteran healthcare editor and analyst with 25 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

There’s little doubt that healthcare organizations will continue to partner up with peers and acquire physician practices. The forces that drive healthcare network development are only intensifying as time goes by, particularly as the drive toward value-based payment moves ahead. But there’s a lot more to making such deals work than a handshake and a check. To make these deals work, it’s critical that networks become experts at population health management — and unfortunately, that’s going to be tough.

While merging health systems into ACOs or acquiring referring physicians has merit, this strategy won’t grow the steadily dropping pace of hospital admissions, notes William Faber, M.D., senior vice president of the GE Healthcare Camden Group. “Though clinically integrated networks do enlarge the patient base, one of their aims is also to reduce the percentage of admissions from that base,” making it unlikely that the networks will grow admissions, he points out.

To make a clinically integrated network successful, it certainly helps to take the initiative – to get to market more quickly than competitors – and to do a better job of controlling costs of care and demonstrating higher quality and service. Where things get stickier, however, is in managing that care across a large group. “The creation of a clinically integrated network must not be just a marketing or physician alignment strategy – it must truly enable effective population health management,” he writes.

And this, I’d argue, is where things get very tricky. Well, judge for yourself, but I’d argue that the HIT industry is ill-equipped to support these goals. Despite many years of paper-chart experimentation with population health, and several with population health technology, my sense is that the tech is far behind what it needs to be. Health IT vendors won’t get far until providers do a better job of defining what they need.

A different mindset

The truth is, this generation of EMRs is designed to track individual patients across an experience of care. While CIOs can add a layer of analytics technology to the mix, that is a far cry from creating tools that natively track population health trends. Looking at populations is simply a different mindset.

Admittedly, vendors will tell you that they’ve got the problem licked, but if they were completely candid many would have to admit that their products aren’t mature yet. Until someone creates an EMR or other basic tool which is designed, at its core, to track group health trends, I foresee more half-baked hacks than results.

What’s more, I doubt the health IT business will be able to help until it has at least an informal standard to which such products must adhere. Should such tools measure costs of care by diagnosis code? Compare such costs to national standards? Highlight patients in outpatient settings whose tests or exams suggest a crisis is about to happen? If so, which settings, and what cutoffs should be tracked for test scores? Does such a system need natural language processing to scour physician notes for trigger words, and if so which ones?

Without a doubt, medical and business executives leading integrated networks will come together and develop more answers to these questions. But until they do, health IT vendors won’t be able to help much with the population health challenge.