Population Management: Long Term Risks of Success

By Jack Duffy

Executive Vice President

As early data is compiled related to results of the first years of population management, some thoughts about the consequences of success may be appropriate. At this time the early adaptors have not been able to consistently show sufficient savings to support population management or a “Medical Home” as the future model. In fact, the recent hospital-to-hospital disclosures related to the cost (charges) for care further points out the significant differences in how care is provided. The migration to evidence-based medicine has significant gaps, and is proving to be generational and not a revolutionary process. With individual physician practice and preference still the dominant healthcare delivery model, change remains incremental and inconsistent. The lack of best practice consensus makes population management very difficult to achieve and maintain over time.

The other question that will become more pressing over time is what if population management works?  There is an ever-changing cause of death list that is moving from events which cause death, such as heart attack or stroke to chronic diseases like diabetes, CHF, COPD and arthritis. Life-extending therapies become more effective every year. These drugs and procedures can extend life for years, but at what cost?  The lifetime spend for a chronic disease population is not fully understood. The risks associated with this type of care will be difficult to manage.

medexchangeThe other factor that will influence the success and economics of population management is an understanding of the roots of the Medicare and Medicaid programs. In the 1930s, when America began its’ decade-long debate about government payment for healthcare, the chosen model was an acute payment process for most significant services. Part B was added to provide limited support for physician services and outpatient care. This support also included a patient responsibility that can total over 50% of total spend (Premium, co-insurance and out-of-pocket costs.)

The intersection of the two above thoughts, which is a growing chronic disease population and a payment model based on acute care funded events, may represent an unreasonable risk for most healthcare organizations. The other factor to consider is the impact of adverse selection. The most needy in a population will move to what they believe is the richest benefit. The way population management programs are positioned and advertised in a community will influence selection.

A very experienced managed care executive once told me that if you cannot attract a subscriber population of at least 500,000 members, you have no business risking your healthcare organization. With demonstration projects using only 5,000 members as a base, it appears that we are not listening to the experience of those who founded the managed care industry.


Comments

  1. Good points. It seems we must be fooling ourselves and not paying attention tothe imperical data .. as is the case with Obamacare, in my opinion. Thanks for the article.

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