Population health's impact on private practice

May 10, 2016

Managing populations presents challenges to small practices that require innovation and careful planning.

As the push to implement population health initiatives gets underway, Lonnie Joe, MD, is still mulling over whether his private practice can survive the changes he’ll have to make to participate in this emerging model of care.

Like many private practice physicians, Joe, an internist who has been practicing for almost three decades, is trying to tailor his four-year-old group practice in Detroit, Michigan, to meet the defined goals of population health: identifying groups of patients with specific medical conditions such as diabetes, hypertension, or cancer, and implementing a variety of health management approaches to improve these patients’ outcomes.

With a population that is aging rapidly (the number of people aged 65 and older is projected to be 83.7 million by 2050, compared with 43.1 million in 2012), the urgency to build a smarter healthcare system that targets older patients, patients with chronic illnesses and others who are more susceptible to worsening health conditions requires a fundamental transformation in how care is delivered and paid for.  

Population health is one of many health reform initiatives that stakeholders claim will slow the rise in healthcare costs and improve patient outcomes. However, for small-to-medium size physician practices, implementing this model often will require redesigning their practices as they adopt new incentive payment models that involve taking additional steps to closely monitor patients so as to improve their health. 

Such an endeavor requires additional staff, better patient engagement and more technology to support population health initiatives. 

“Implementing a long-term population health strategy at private practice physicians’ offices requires a team-based model of care with skilled personnel and infrastructure, all of which requires adequate financial support,” says Nitin Damle, MD, FACP, president-elect of the American College of Physicians.  

For Joe, the costs are too high and the goals are difficult to achieve. 

“It’s expensive,” Joe says. “For a start, I would have to hire a full-time employee to call my patients to remind them of appointments, follow up with medication adherence and perform other mundane tasks.”

Those “mundane tasks” are the meat and potatoes of what will make population health a success, says David Nash, MD, MBA, and dean of Jefferson College of Population Health at Thomas Jefferson University in Philadelphia, Pennsylvania.

 

Nash says private practices will need to contend with four key tactical realities:  

managing their test ordering behavior, 

coordinating care with other practitioners, 

referring patients to specialists and 

admitting their patients for both acute  and chronic care.

“In a world that is focused on improving population health, profligate testing  and wasteful prescribing would have to end,” Nash says. “For example, prescribing a statin for an 87-year-old woman or ordering a prostate-specific antigen test on a 92-year-old man makes no clinical sense.”

 

Identifying barriers

While the fundamental requirements for supporting population health targets call for a new approach to delivering care, the limits that come with practicing medicine among low-income, chronically ill patients has restrained Joe’s 14-member private practice from fully participating in an initiative that would help the 100 patients (65% are senior citizens and 60% suffer from diabetes) that Joe sees every week.

A basic requirement for a successful population health initiative, Joe says, is an office that’s accessible to the population it serves, but this is often a challenge, particularly in poor communities. Many of Joe’s patients are covered by Medicaid, don’t have a car and depend on relatives to take them to doctor appointments. If these relatives are working on the day of the appointment the patient won’t come to see him. 

“I have patients that have to make a choice between paying for transportation or paying for their copay–they can’t pay both,” Joe says. 

Another challenge is access to the Internet. To coordinate care and engage patients, healthcare providers are increasingly using emails, but many of Joe’s patients can’t be reached that way. 

“Fifty percent of the patients that my physician practice serves do not have access to the Internet, and many of my older patients don’t know how to send or receive emails,” he says.  

Even with these challenges, Joe recognizes that population health is the care model of the future.   

 

With this in mind, Joe met earlier this year with a health plan offering incentive payments if his practice targeted groups of patients and implemented policies that met medical benchmarks as a way to demonstrate improvements in patient outcomes.  

“The health plan’s incentive program is attractive because it’s dollars we don’t have, but there’s a downside,” Joe says.

He noted that in order to meet the incentive plan requirements his office would have to hire an employee to contact patients on a full-time basis.  

“That would cost our office approximately $40,000 per year, which means we would spend more than we would receive in incentive payments,” says Joe, who is also a speaker for the National Medical Association’s House of Delegates. “I have not seen very many approaches under the banner of population health that address the day-to-day issues our private practice has to tackle in order to advance a population health strategy.” 

As healthcare reform presents endless challenges and changes, Joe is thinking about his next moves. He might join an accountable care organization, a hospital or a larger health system.

Whatever he does, Joe says the current trend doesn’t bode well for physicians seeking to lure younger physicians to join their group practice.      

“What we are seeing is that initiatives like population health are turning many younger physicians away from private practice. They prefer to join a hospital or healthcare system that has deep pockets, all the technology they need and a good salary,” Joe says.

 

MIPS decisions looming

Even as small private practices face significant hurdles to adopting population health, the drive to implement measures that improve  outcomes while developing payment models tied to quality metrics is advancing at a rapid pace.

In line with this shift, the U.S. Department of Health and Human Services has set a goal of tying 85% of all traditional Medicare payments to quality or value by the end of 2016 and 90%  by 2018 through programs such as the Hospital Value Based Purchasing and the Hospital Readmissions Reduction Programs.

Last year’s passage of the Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) has heightened the sense of
urgency among healthcare stakeholders to develop new initiatives that will transform the payment system from a fee-for-service model to one that rewards paying for value and better care. 

As new payment and care models emerge, population health is forcing private practice physicians to reconsider how they’ll manage every step of their engagement with patients. 

With costs a growing concern Damle, who is part of  an eight-physician internal medicine in Wakefield, Rhode Island, says adequate funding could be achieved if health plans reimburse providers through innovative payment models, which include a per-member per-month fee, enhanced fee-for-service payments, a population-based global payment and pay-for-performance initiatives to cover the costs of implementing and practicing population health.   

 

Damle says that health plans provide his practice with a baseline fee-for-service payment for seeing patients at the office, and an oversight member-per-month payment. The practice also receives reimbursements for reporting quality measures to programs that the private health plans operate.  

“We also receive payments for meeting quality measures such as smoking cessation counseling, blood pressure control in hypertensive patients, diabetes control, colon and breast cancer screening and other quality metrics,” Damle says.

However, the payments don’t always cover the costs associated with the expense of new technology and personnel needed to support these programs.    

“When we add up what we spend to support population health targets and subtract what we receive in reimbursements from the insurance companies, we break even. It’s not profitable. It’s really a matter of quality more than anything else,” Damle explains. 

What shouldn’t be forgotten in this equation is the benefits population health initiatives provide to health insurance companies. 

“Health plans receive a good return on investment. The patients they insure are healthier, have fewer complications and end up in the emergency room or are admitted to the hospital less frequently,” Damle says.

 

Embrace the early stages

Unlike Joe, Damle’s population health initiatives benefit from serving a middle-to-high-income population of patients who have jobs, cars to drive to their appointments and ready Internet access.

Still, to curb costs and improve quality measures, Damle’s practice is considering joining an accountable care organization to leverage technology and tap the expertise of  personnel such as pharmacists, behavioral health specialists and clinical nurse managers to support patients with complex needs. 

As private practice physicians find their footing in the population health model, other healthcare stakeholders are embracing it. The Healthcare Information and Management Systems Society’s research division, HIMSS Analytics, recently released an addendum to its December, 2015 Population Health Essentials Brief. 

The additional research, which focuses on chronic disease management and preventive health and wellness, shows that of the nearly 200 healthcare executives interviewed, more than half of those without a population health initiative at their organization said they plan to implement population health programs in the future. 

HIMSS research also shows that the leading areas of focus for organizations with chronic disease management initiatives in place are diabetes (75.9%), congestive heart failure (58.6%) and chronic obstructive pulmonary disease (41.4%).

 

Respondents indicated a strong effort to tackle chronic diseases, specifically diabetes and congestive heart failure, says Brendan FitzGerald, director of research for HIMSS Analytics. 

Physicians such as Yong Ki Shin, MD, and his wife, Clara Shin, MD, also are seeing this trend, but doubts abound as to whether population health strategies can effectively work to combat patients with chronic diseases in lower-income communities. The couple operates a two-person internal medicine practice in Montesano, Washington, which has a population of 4,000. Yong Ki Shin, who has been practicing for two decades, says that approximately 25% of his patients have diabetes, and 70% are over age 65. 

Among his concerns is that population health programs don’t take into account the differences between rural and urban patient populations or income disparities. 

“Patients in cities where the population has jobs and high incomes are going to have better access to care than patients living in rural areas where incomes are below the national average. The way I see population health is that one size doesn’t fit all,” Yong Ki Shin says.

He adds that practices should not be denied incentive payments because their patients don’t visit the doctor or practice medication adherence. He notes, for example, that healthy individuals that are not mentally ill have more energy and resources to take care of their diabetes.

“If you are uneducated, have limited income to pay for insulin or if you are addicted to pain medicine and you have bipolar disorder taking care of diabetes is going to be much more difficult,” Yong Ki Shin says.  

Still, even ifhe declines to take dollars from health plans that offer population health incentives, his practice will survive largely because of his income from other jobs. He is assistant dean and clinical
associate professor of Medicine at the University of Washington School of Medicine,  and treats patients at the Grays Harbor County Jail. 

As physicians prepare to meet the demands of this new initiative, HIMSS’ FitzGerald says it’s worth remembering that population health and the cost models to support it are still in the early stages of development.

“The use of at-risk cost structures are limited and they are essential in practicing true population health,” FitzGerald says. “For physician practices who are looking to initiate population health programs I would recommend they get executive/physician buy-in and move forward as a team, start where they see the most need within their current population and be consistent in their approach.”