The population health challenge

Fee-for-service medicine is on the way out. That may be hard to believe if most of your income still comes from such payments, which reward physicians for the volume of services they provide. But it’s clear that payers are increasingly emphasizing reimbursement methods that reward value, rather than volume-and that that transition is accelerating.

On March 3, the U.S. Department of Health and Human Services (HHS) announced that it had reached its goal of tying 30% of Medicare payments to alternative payment models (APMs) nearly a year ahead of schedule. By the end of 2018, HHS predicts, about 50% of Medicare payments will be going to APMs such as accountable care organizations (ACOs), patient-centered medical homes (PCMHs) and bundled payment arrangements. Medicare’s new physician payment methodology, which takes effect in 2019, will be another step away from fee for service. Private payers are moving in the same direction at a similar pace. 

 

Further reading: Why physicians should frame every desicion with the 'quadruple aim' in mind

 

As reimbursement shifts from pay for volume to pay for value, population health management (PHM) is gaining traction among physicians and other healthcare providers. In this care delivery model, a key ingredient of both ACOs and PCMHs, providers focus on optimizing the health of their entire patient panel, rather than just diagnosing and treating individual patients when they present for care. 

Whether practices are contracting with payers for shared savings or are taking on financial risk for the care they provide, they must learn how to manage population health to succeed under value-based reimbursement. The measures used in determining value-based payments are quality, costs and patient experience; no healthcare organization can do well on those indices unless it can manage population health to prevent people from getting sick or sicker.

In a practice or organization that embraces PHM, physicians and their care teams stress preventive care and proactively manage chronic diseases. Care managers provide extra assistance to high-risk individuals, and physicians work with other providers to improve transitions of care, especially after hospitalizations.

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