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Population Health Management Deciphered

Alan M. Preston, Sc.D., MHA
Founder & CEO, E=(MC)3, Austin, TX

As a former professor teaching epidemiology, the phrase “population health management” resonates with me. Epidemiology is the study of the incidence and prevalence rates of diseases within certain populations. Incidence rates describe the sudden onset of a disease and prevalence describes how long a disease may be present in a given population. However, in the context of a physician’s practice, population health management takes on an entirely different perspective.

Physicians manage one patient at a time. Over the course of a year, if we added up all the patients seen by a primary care physician, the entirety of that population may have some common characteristics that may need to be tracked and managed. To the extent a primary care physician averaged 20 patient visits a day for 210 days; they would encounter approximately 4,200 patient visits annually. Some of the visits are repeat follow-up visits and probably account for over 50 percent of the patient population. Thus, a primary care physician may have a panel of patients for a year of approximately 2,500 to 3,000 patients.

Of that population of patients, there are some characteristics that have similar disease classifications. Take type 2 diabetes, for example; the prevalence rate of type 2 is approximately 9.3 percent (i.e., 29 million people) of the general population according to the Centers for Disease Control. However, over 86 million have “pre-diabetes.” And of the 29 million people who have type 2 diabetes, approximately 8.1 million people don’t know they have it and are undiagnosed!

This is a good example where population health management can play an important role for both the patient and the doctor. Imagine if a physician’s practice ran a report that looked at many of the risk factors for type 2 diabetes. Some of the risk factors would be: age, weight, ethnicity and gender, to name a few. That list could be cross referenced with known lab data to determine whether the “population of interest” had their HBA1c or blood sugars tested and resulted. If not, scheduling the patient for a visit to perform such a test in the population of interest might reveal undiagnosed patients and pre-diabetic patients. Treating the undiagnosed patient and the pre-diabetic patient and gathering data on both types of clinical criteria are the benefit population health management offers.

And the Centers for Medicare and Medicaid Services (CMS) are very interested in physicians that understand how to perform population health management functions. CMS understands that physicians that embrace the benefit of population health management should be paid for their patient’s improved healthcare outcomes.

Private Medicare Advantage insurance companies are already contracting with physician groups and independent practice associations (IPA) to share in the savings these organizations deliver by helping physicians achieve better outcomes. For the independent physician, teaming up with an experienced IPA can add value to their practice immediately. Some of the Medicare Advantage plans are sharing in the savings to the extent that that the IPA and their physicians achieve a medical loss ratio (MLR) less than the contracted target of the health plan’s MLR.

Since the physician receives a fee-for-service (FFS) amount for each office visit of the Medicare Advantage patient on the front end, there is upside income potential for physicians on the split savings on the back end when the doctor is participating in an experienced IPA. Thus, when the front-end payment is added to the back-end split in savings, some physicians have collected over 200 percent FFS in reimbursement for their population of interest.

Of course, for physicians’ that have a full booking of patients, adding more patient visits to their busy schedule can seem daunting. The key is to prioritize the patients from those with the most severe and acute disease, which may need treatment sooner than later and the less severe that can be fit into the doctor’s schedule over time.

Unfortunately, most practices are not that proactive in managing their patient populations. Many practices are filled by the patient demand. A patient has a symptom and calls their doctor to be seen. Seldom does a practice data-mine their own patient population to determine who might be at risk for some particular disease and reach out to these patients in an effort to slow down the progression of the disease or, in some cases, stop it altogether.

Population health management involves many aspects of managing a patient. The goal is to assure that for a given disease, the patient is contacted, treated and followed-up with and the outcome is improved. There have been some early attempts of trying to get physicians to adopt components of population health management. Leveraging the Healthcare Effectiveness Data and Information (HEDIS) is one such attempt.

HEDIS is a tool used by more than 90 percent of America’s health plans to measure performance on important dimensions of care and service. Many health plans use the HEDIS measurements to highlight their scores to prospective employers. HEDIS measures address a broad range of important health issues. Among them are the following:

  • Asthma medication use
  • Persistence of beta-blocker treatment after a heart attack
  • Controlling high blood pressure
  • Comprehensive diabetes care
  • Breast cancer screening
  • Antidepressant medication management
  • Childhood and adolescent immunization status
  • Childhood and adult weight/body mass index assessment

For the Medicare Advantage population, CMS has used another tracking program called Star Ratings (Hospital Consumer Assessment of Healthcare Providers and Systems). One difference between HEDIS and the Star Ratings is that HEDIS is responsible for making sure that providers perform the activities of measurement as required by HEDIS, whereas Star Ratings requires both the performance of the measurement activity with the additional requirement of demonstrating improved outcomes. Thus, it is not good enough that the doctor saw the patient; they also need to make sure that the prescribed treatment is moving towards a positive outcome.

Star Ratings are driving improvements in Medicare health quality. The Star Ratings measures span five broad categories:

  1. Outcomes
  2. Intermediate outcomes
  3. Patient experience
  4. Access
  5. Process

Not every domain is weighted equally. For 2017 Star Ratings, outcomes and intermediate outcomes continue to be weighted three times as much as process measures, and patient experience and access measures are weighted 1.5 times as much as process measures. CMS assigns a weight of 1 to all new measures. Of the 364 health plan contracts that participate in Medicare Advantage, there were only 81 with a Star Rating of 4.5 or higher.

The implications for physicians is that health plans want to contract with physicians, or IPAs that contract with high performing physicians, that can demonstrate high Star Ratings. Those physicians that have lower Star Ratings may experience cancellations from the managed care companies. The private Medicare Advantage companies will not, in the long run, keep physicians that are doing a poor job managing their population of patients. Thus, if you are a physician that is looking to participate in population health management, you might want to first look at high performing IPAs to assist you with your practice before you receive a cancellation notice from a managed care company that is measuring every doctor on their plan.


Alan M. Preston, MHA, Sc.D. is the founder & CEO of E=(MC)3, an organization that helps companies break out of their non-effective state to move them to a high performing company. His company helps develop healthcare policy with a focus that includes managed care, physician practices, hospitals, PBMs, and ancillary healthcare services. He is a former professor in the Healthcare Management MBA program at Texas Health and Science University. He has served as Chief Executive Officer for Oncologics, a company of eight radiation and oncology clinics, and GMG Management Group, which operates primary care clinics and outpatient surgery, physical therapy, occupational medicine, radiology and urgent care centers. He was CEO and Founder of Synergist Research, where he serviced co-owned research centers as well as contract research functions to various start-up pharmaceutical companies. From 2010 to 2012, Dr. Preston served as Vice President for Academics, Research and Assessment at Texas Health and Science University. He previously served as a professor at University of the Incarnate Word in San Antonio and Texas A&M University where hetaught graduate business and management students while conducting research in the areas of epidemiology, statistics, healthcare policy, health insurance systems and healthcare management. Dr. Preston has Sc.D. in Health Services Research and a MHA in Health Management from Tulane University, New Orleans, LA, and a BBA in Business Administration, from the University of Louisiana, Lafayette, LA. He resides in San Antonio, Texas. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..


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