Commercial risk will be a critical catalyst of progress – it’s complicated, but is it possible? We think so.

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How to pace your population health investments

January 31, 2018

    Based on what we've seen throughout both of our careers, we couldn't have imagined the speed at which certain markets have tipped to value-based payment models. We saw providers, payers, or sometimes large employers, in parts of the country that seemed steadfast in their commitment to fee-for-service upend the market's status quo and replace it with an entirely new model in as little as six months.

    But while impressive, moving towards population health at such a quick speed can be risky.

    For some health systems, market pressures to advance their efforts are getting in the way of strategic pacing and are leading to less impactful investments. Here are three ways to keep up the momentum without sacrificing results.

    Accelerate change from the top down

    When evaluating organizations, we first look at whether they view population health as a mix of pilot projects or a shift towards sustainable long-term operations. Whenever we look at organizations that have a collection of pilots versus those that are making meaningful shifts toward sustainable operations, we see a significant difference between efficiency and impact.

    To stay on track for real impact, the system leadership—including the board of directors—must embrace population health management as a comprehensive strategy. Whether that means taking on financial risk today, or just creating a roadmap for risk in the future, there needs to be a top-down commitment to a brand new way of managing the network and caring for the patient. And with that high-level focus, a system can start building key relationships in the market with dominant payers or employers — so not to miss out on commercial contracts down the road.

    Start with 'no-regrets' investments

    Our team finds that many organizations define their population health management capabilities by the amount of their business under financial risk. But the good news for system leaders is there are competencies and infrastructure pieces that don't involve risk and have a positive impact in both fee-for-service and value-based care scenarios — what we call 'no-regrets' investments.

    So before you put all your eggs into contracting, there are three things we'd argue you need to get right to manage population health and maintain a healthy ROI: Meet new access standards, reduce clinical variation and keep patients in the system.

    Our colleague, Megan Clark, provided more detail about the significant financial benefits that these three capabilities have—but the financial impact goes even further.

    These investments are so important, and they are ones that we're particularly passionate about, because they can ultimately fund the economic transition from fee-for-service to an accountable payment model by improving growth, efficiency and patient loyalty to the system.

    Prioritize your next steps through data

    There's one investment, which is really the key to pacing your population health strategy, that seems to be underfunded in provider systems—the analytic resources and technology that form the business intelligence foundation necessary to understand the economics of such a significant transition.

    A lot of organizations have the tools to stratify patients by risk-level and conduct analysis on the care management side, but can't see, for example, how much patient leakage they have or calculate the impact of clinical variation. At the end of the day, it's critical to monetize the infrastructure investments, know what's actually paying off and use that information to map out next steps.

    With those financial metrics and a clear sense of ROI, leadership and the board of directors can have confidence in accelerating transformation and committing to real change from the top down.

    A previous version of this post originally ran on March 4, 2016.


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    Next, learn how to build a successful population health roadmap

    To successfully make the transition from volume to value, organizations need to build a comprehensive strategy—or population health road map—that fosters seamless coordination between strategy and operations, while simultaneously ensuring financial viability for near and long-term alike.

    Download our white paper to learn how to assess your organization to understand current capabilities and future opportunities; define your vision, strategy, model, and tactics for driving towards population health; and build, and appropriately pace, your population health road map.

    Download Now

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