3 Ways Population Health Management Can Improve Outcomes and Lower Costs

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Did you know that according to the CDC, 60% of adults in the US have a chronic health condition and 40% have two or more? It is no wonder that the health data analytics and artificial intelligence market is approaching 1100% growth in just 7 years as the opportunity for chronic disease prevention and management grows. 

In a world where health insurance rate increases outpace general inflation by wide margins, this stat begs a reasonable question. Namely, is this explosion of health analytics and technology translating to lower costs within the U.S. healthcare system?

We’re glad you asked!

We’ve previously outlined how data and technology has enabled employers to be more creative in engaging their workforce in their own pursuit of personal well-beingThis explosion of data and analytics is also providing employers with unique insights into their population health with much greater insights than ever before.  A new industry of its own is rapidly growing on the tidal waive of employers looking to capitalize on this data and technology through what is widely referred to as population health management.

What is Population Health Management (PHM)?

Population health management is defined differently in different contexts, but from the perspective of an employer, PHM is the use of healthcare data to identify actionable insights for the following purposes:

  • Improving quality, accessibility and cost of care for the sick and chronically ill
  • Early identification of & intervention with individuals of deteriorating health
  • Educating workforce on healthcare consumerism opportunities

Prior to looking deeper into each of these, let’s take a step back and look at how PHM solutions are typically structured.

Components of a Population Health Management Solution

PHM solutions are generally comprised of a smart data warehouse system with sophisticated algorithms and a team of dedicated data analysts and healthcare industry specialists.

Through the use of data mining and predictive analytics, plan members are stratified into population subgroups based on common attributes. The data warehouse system melds all the data sources together so that an individual member’s medical, pharmacy, and, in some cases, relevant social determinants can be used to identify and predict emerging risk and high-risk patients.

This data is then continuously cycled through these algorithms that assign risk scores to every individual in your population.  This step is critical for identifying who needs to be prioritized for targeted engagements.  Equipped with this information, teams of healthcare specialists are then able to quickly apply their expertise to complete the story the data and algorithms have only begun to outline.  Typically, this is a team comprised of physicians, pharmacists, data scientists and care coordinators who work together to build custom engagement plans for members within your health plan.

But Isn’t My Insurance Company Doing That?

Historically, employers have taken insurance carriers at their word that the carrier’s disease, utilization and care management programs are checking off all the boxes and maximizing population health engagement opportunities.  However, with the explosion of technology that now involves data jumping off our wrist watches into a cloud somewhere, the question is all the more warranted, namely, is my insurance carrier keeping pace?

Insurance Carrier Solutions

Let’s think about the incentive behind the insurance carrier to administer population health management really well.  PHM requires a significant investment in technology and skilled workers for insurance carriers to keep up with the increasing opportunities, neither of which comes cheap. This investment would cause administrative fees to go up, hurting the carrier’s competitive position in the market in the short-term, while they could be waiting indefinitely before achieving any significant return on their investment.

We should also not overlook the fact that the insurance companies benefit from your claims increasing.  Their profit targets are generally a fixed percentage.  Do you think they would rather have a fixed percentage of a premium growing at 5% or 10%?  Clearly the latter helps their bottom line while the prior really only helps them from a marketing perspective.

Employer Opportunity

If the insurance carrier or third party administrator’s PHM solutions are under-performing, the onus is on you, the employer to work with your benefits adviser on how to capitalize on this opportunity.  One of our diabetes solution partners, Dr. Alicia Warnock of Stability Health, believes that employers are in a unique position to advocate for the diversity of their employees’ needs given all the new data-driven solutions at their disposal.  Rather than having a cookie cutter solution applied to your entire population, as has occurred historically, employers today are now able to offer “a la carte” programs that lead to members feeling uniquely supported by their employer, not to mention empowered to manage their health in a way that is more cost effective for everyone.

Capitalizing on Population Health Management

PHM begins with data insights, namely, dashboards and reports with near real-time insights into the health conditions of your population, prioritized by the greatest opportunity for engagement.  However, if you stopped here, that would just be population health reporting.  PHM relates to the steps you take that answer the “so what?” of traditional healthcare reporting.

You can ensure you are capitalizing on PHM opportunities within your population by focusing on the following three aspects of PHM.

Aspect #1:  Improving Quality, Accessibility and Cost of Care for the Sick and Chronically Ill

Your priority of PHM must be your population that is sick or chronically ill.  These individuals are the ones that will be the most open to engagement, because they are the ones with the greatest need of engagement.  Managing severe illnesses or chronic conditions is often very stressful to the health plan member and their family; expensive treatments, numerous appointments and adhering to the strict plan of care prescribed by their physicians is overwhelming and compounded by trying to balance work and family responsibilities.

Engaging this population is also where you, the employer, has the most to gain.  On top of the presenteeism and absenteeism concerns these members present if they are employees, the financial outlay the health plan is making towards managing these conditions is also significant, usually expressed in hundreds of thousands of dollars.

Given the high cost of care associated with managing these conditions, you may not be surprised to learn that statistics regularly demonstrate that 5% of your health plan members account for 50% of your costs and that 20% account for 85% of plan costs.  Therefore, population health management must start with this 5%.

Person-Centric Solutions

But as you know, “this 5%” is much more than a number.  These are your employees or your employees’ loved ones.  Your benefits consultant must keep this at the forefront of their mind when making recommendations for how to engage this portion of your population.  While they are the most in need of help, they are also the most sensitive to confidentiality and the wariest of whose best interests are in mind with any so-called “assistance” offered to them.

You must also avoid the danger of condition-centric solutions.  Often, there are comorbidities in play with any chronic condition, and as such, your population health management solution must be person-centric.  This will ensure the individual is receiving concierge-like support that helps them with all of their healthcare needs and understands the interactions and complexities associated with their specific situation.

Pharmacy Intelligence

Solutions must also include prescription drug expertise.  According to another PHM solution partner, Workpartners, the typical member in this top 5% is taking 10 different prescriptions.  With extremely expensive specialty drugs one of the highest trending expenses in our health care system for the foreseeable future, PHM solutions must have pharmacists involved in helping complete the case notes on recommendations for member engagement.

Aspect #2: Early Identification of & Intervention with Individuals of Deteriorating Health

Dr. Warnock believes that the American health care system is set up to fix rather than prevent diseases, which is why organizations with a pre-emptive approach to PHM are gaining so much traction.  One of the simplest and effective ways to start down this path is through offering biometric screenings.

Biometric Screenings

There are generally significant portions of every population that don’t see a doctor regularly and as a result are not aware of personal health care metrics let alone diseases that are already building within their bodies.  In fact, many seem to think a 5- or 10-year period without seeing a doctor is a badge of honor to wear proudly and boast about at the watercooler.

This is where the convenience of biometric screenings can be impactful.  Through a single blood draw or finger stick, a lobotomy-based solution can provide your employees with key health readings on metrics such as sugar levels, cholesterol, blood pressure and BMI.

Solutions Driven by Predictive Analytics

While encouraging routine check-ups with primary care physicians or blood work is certainly a good start toward early identification of health conditions, there are a growing number of data-driven solutions emerging beyond these.  Through the constantly growing database of health care results across individuals of all demographics and conditions, population health management vendors can proactively identify members with deteriorating health through predictive modeling.

As the majority of chronic conditions are believed to be avoidable through appropriate diet, exercise and healthy lifestyle choices; predictive analytics is an especially powerful tool when the data is bolstered with individual behavior metrics.  There is a lot that analytics can predict about an individual from dental services, prescription drug usage and healthcare, and only gets stronger when supplemented by data from biometric screenings, wearable devices or diet information fed from mobile technology devices.  The prospects of the future within this space are very exciting!

Aspect #3: Educating Workforce on Healthcare Consumerism Opportunities

If predictive analytics can capitalize on information surrounding diet, exercise and lifestyle choices to project future high cost claimants, then providing employees with educational opportunities, tools and resources geared toward these same topics is certainly a prudent exercise (no pun intended).

There are many resources provided by your insurance carrier, vendor partners, State or Federal agencies, and non-profit organizations such as the American Heart Association that you can tap into for ideas and free resources.  The most effective way to engage your population in these “preventive maintenance” exercises is to make sure your efforts are well organized, easily accessible and championed by leadership within the firm.  You can read more about our ideas surrounding this in our previous post on Smart Well-being programs.

Eliminating Barriers to Healthcare

Regardless of the aspect of population health management under consideration, it is crucial that any solution implemented operates from the perspective of the healthcare consumer and how to make accessing appropriate care as seamless as possible.  This may seem obvious but consider how most health plans work.  Most health insurance plans “penalize” the member for obtaining care with a copay or deductible.  While copays and deductibles are certainly components that serve a critical function of steering the masses toward better healthcare consumerism; they can certainly back-fire on employers when they discourage an individual from getting the care that they need.

One in every four individuals report not filling medications because of the associated costs.  Much like we see in many other areas of life such as automobile care, if the preventive maintenance isn’t done, it’s no longer a question of if, but when much more catastrophic and costly damage will manifest itself.  We encourage implementing solutions, both in health plan design and in vendor programs, that reduce or eliminate cost-sharing requirements for services designed to manage or prevent chronic conditions or severe illnesses.

Population Health Management is a Smart Investment

Whether you like it or not, you, the employer, is better positioned than any other entity to optimize health plan savings and your population’s healthcare experience.  In fact, you may as well consider your firm the center of disease management and prevention for your employees and their dependents.  Do you want help getting started?  Reach out to your benefits consultant to identify a plan of action that identifies low hanging fruit and opportunities for how to build from there.

About the Author

Ben Lewis resides with his wife and four kids in Rochester, NY where he has lived since coming to Rochester for college in 2001.  After completing his Bachelors of Science in Mathematics at Rochester Institute of Technology in 2005, Ben went on to work at Excellus BlueCross BlueShield where he developed insurance rates for large fully insured and self funded employers.  During these years Ben also obtained his MBA in Finance from RIT.   With industry experience coming from a variety of rolls in finance, benefits consulting, marketing and even a brief stint as an HR Benefits Manager, Ben joined Consiliarium Group as a partner in April, 2019.  Brought on as the Strategic Healthcare Practice Leader, Ben’s responsibilities include heading up the Self Funded business unit, vetting emerging healthcare technology or vendor solutions, and championing the marketing efforts at Consiliarium.  

Ben’s ambition is to help employers empower individuals to pursue personal well-being by working with HR and Finance teams to employ smart, sustainable benefit solutions that meet individuals where they are at and simplify the journey for where they want to go.  When individuals are informed and empowered to become better consumers of healthcare, the results make it a win for everyone.