Managing Health Framework
Our healthcare system has a “managing healthcare” framework for treating conditions and providing services that has evolved to perform to the medical payments that reward volume of services. To be successful with new population health payment models (value-based payments, alternative payment models, capitation), we will need to create a “managing individual health” framework that complements and integrates with the current “managing healthcare” framework. Physicians and Healthcare systems will need to be effective within both of these frameworks for the next 5 years or even longer.
The new “managing health” framework will overlay upon the “managing healthcare” framework designed to efficiently and effectively manage treating a condition, physician office visits, ER visits and hospital stays. The “managing health” framework has five tightly integrated pillars:
- Operating Model
Physician Practices and Healthcare systems need to closely monitor changes or insight from any of these pillars. A change management system will be required to evaluate the impact of changes or insight on components within each pillar.
Patients are typically attributed to Primary Care Physicians (PCPs) and Healthcare systems based on having most of their primary care services provided by them in the past 12 months or through a qualifying bundled payment (i.e., Joint Replacement, Oncology Care). The attributed populations are the denominators in calculating any value-based payments, incentives or gain share from alternative payment models.
PCPs and Healthcare systems are typically involved in 10-15 initiative that require “managing health”, yet they are often managed in silos. They include Medicare (Medicare Advantage contracts, ACOs, MACRA for physicians, value-based and penalties for Hospitals), Commercial Health Plans (quality incentives, narrow networks, CINs, Exchange Plans, etc.), Medicaid (Medical Homes, Managed Medicaid, DSRIP, ACOs), Self-Insured (Employees, Employer Direct, Administrative Services), Care Management Codes, Leakage, Bundled Payments, Patient Loyalty and many more. The operating plan requires on integrated approach that includes each of the initiatives.
PCPs and Healthcare systems will require new competencies and training within the “managing health” framework. This includes payer relations (data exchange, partnering, contracting), Physicians Workflow (additional staffing, performance reporting, workflow redesign), Care Management (attributed population management, health coaching, care coordination), Technology (integrating EMRs and payer data, normalizing, reporting, actionable intelligence creation) and Performance-Based Contracting (with physicians, affiliates, payers, vendors, partners, life sciences).
PCPs and Healthcare systems leadership and management is organized around the current “managing healthcare” framework” which still may represents over 95% of the current revenue. For continued success, most PCPs and Healthcare systems will need to be successful within both frameworks, yet current operating margins typically don’t support hiring people dedicated to the new “managing health” framework. At a minimum, a “managing health” committee or change management system is required to ensure decisions are not made without input from each of the impacted leaders and managers.
The operating model will consist of a revenue forecast based on the populations, initiatives and implementing new competencies over 3-5 years. It will have detailed flexible financial budgets tied to the worst, likely and best case revenue scenarios. The budgets would detail the cost and assumptions to create and maintain each of the identified competencies. It will have a detailed implementation, training, reporting, governance, incentive and staffing plan.