The shift to a population health payment model dramatically
changes the way providers are paid for their services. It also dramatically changes the way providers need to deliver services. Success in the fee-for-service payment model is based on how much care a provider delivers, i.e., price x volume = revenue. Prospering in the population health payment model changes that equation as revenue is attached to “attributed lives” rather than being tied to service volume. Much has been written about changing incentives and the need to transform the way the delivery system is structured to align incentives between different providers, but there is more to transformation than simply restructuring. Making the “transformed delivery system” effective requires successful adoption and execution of strategies that have not previously been the focus of providers.
At the center of the population health payment model is a concept called “patient attribution.”Attribution of a patient to a provider assigns responsibility for the care of that patient to that provider for a set rate (capitation payment). This means that the provider becomes responsible for the cost and quality of that patient’s care, regardless of who actually delivers the services. Under population health payment contracts between the provider and the patient’s insurer, the provider stands to gain (or lose) financially, depending on the cost and quality (value) of services provided to the provider’s panel of attributed patients.
To support physicians in caring for their attributed patients, providers need to rely on analytic capabilities to stratify and distinguish between those patients with mainly primary and secondary prevention needs and those with current or predictable high health care needs (high-risk and rising-risk patients). Once the high-risk and rising-risk patients have been identified, care coordination becomes the unifying principle through which resources and interventions are organized to provide the patient with the best outcomes at the lowest cost. Effective care coordination is the linchpin to successfully delivering high-value care to attributed patients and to managing the financial risk assumed through population health payment contracts.
Contracting with insurers and delivering coordinated care depend heavily on information gleaned from analyzing both claims data and clinical data. Data analytics and care coordination are critical capabilities for providers to successfully accept responsibility for a defined population of (attributed) patients. Stroudwater has deep expertise and experience in these (and other) methods to support an organization’s population health strategy. As the challenges of our rapidly changing industry mount, we stand ready to help you find a way through the changing landscape. We look forward to having the opportunity to assist you in responding to these challenges in support of your organization and your community.
Don Horstkotte is a Principal at Stroudwater and Marc Voyvodich is Chairman and Chief Innovation Officer. Both Marc and Don are leaders in our Strategic Planning practice.