How Providers Can Prepare for Population Management

Jeff Bass , MD

Regional Director

Published August 29, 2014

On my first day of medical school, during introductory lectures, the dean said something that seemed a little radical:

"At least 50 percent of everything we teach you in the next four years is going to be proven wrong at some point in the future. The only problem is, we don't know which 50 percent that is."

Those words are particularly salient today as our system begins its shaky transition away from fee-for-service toward population health management. Today's physicians must adapt and evolve not only clinically, but in the realm of care delivery as well.

Changes on the Horizon

We've been hearing for years that population management is coming, yet it seems to be arriving more quickly than anyone expected. The Centers for Medicare and Medicaid Services (CMS) plans to phase in bundled payments beginning in 2017, and history suggests that private payers will follow its lead.

For me, the magnitude of the coming change was underscored by a recent development affecting one of my practice locations. Its parent company, a for-profit health system, decided to shift to a model in which a single physician group manages multiple service lines across its 12 hospitals.

In doing so, the hospital hopes to shield itself from some of the financial and political risks inherent in population management. Notably, the new group would be responsible for redistributing physician earnings across hospitals with different payer mixes. It would also be responsible for dividing the bundled payment "pie" among multiple providers.

My hospital isn't alone. The shift toward population health is driving enormous changes across our industry. Within a few short years, hospitals and physicians will be working on fixed budgets. In such an environment, it's imperative to improve quality while containing costs.

Perhaps the biggest change will involve the need for care coordination. Whether you think it's fair or not, the government intends to hold providers and their hospitals accountable for gaps in care. For example, if my 90-year-old congestive heart failure patient is readmitted two weeks later because she hasn't taken her medications correctly, I can't shift the blame to her family or primary care doctor. In our new (and hopefully improved) system, it will be my responsibility to work with the patient, family, fellow providers, allied health care professionals and community resources to promote a positive outcome.

This shift to population management is a difficult one, and I think some resistance from the physician side is both expected and natural. However, I do think most physicians — even those in the more episodic specialties like emergency medicine — agree there's an urgent need for change. No longer can we see the patient purely through the lens of our specialty — as someone with a kidney problem, a heart condition or a wound to be sutured. Care will only improve when each of us takes responsibility for the whole person.

The Importance of Adaptability

Population management demands new skills and attitudes from providers. Most importantly, we need to start seeing ourselves as managers of health. This means teaming up with fellow physicians and community organizations to close gaps in care, whether we're handing off a patient from the ED to the inpatient floor or formulating a post-hospitalization care plan with a primary care provider.

Care coordination requires innovation and teamwork. For example, in the case of my frail CHF patient, my group could arrange for home health aids to follow-up with her at home. Or we might call her primary physician and arrange to have his nurse call to check her weight daily so they can adjust her diuretic medications.

Shifting provider roles can be tough, but it can be done. Through innovation and collaborative spirit, many groups are already closing healthcare gaps and achieving great results for patients.

Maintaining Integrity

In addition to new roles for providers, population management will likely raise certain ethical questions.

To meet the challenges of reform, hospitals and health systems are changing their business models. Mergers and takeovers by corporate management companies are commonplace. An estimated 90 percent of physician job openings are now employment based. And many ACOs are partnering with independent practices, using benefits like billing services and malpractice insurance as enticements.

Bigger isn't always bad. The backing of a large organization can provide physicians with valuable resources and services as well as a large pool of population data to guide care decisions.

But given the fiscal pressures on hospitals, there's a real danger that organizations could sacrifice quality for the bottom line; and too often, these savings come at the expense of patients. For example, an inexpensive physician management company might look attractive to a fiscally strapped hospital. However, it might also emphasize volume and cost savings over service and sound practice, giving physicians less face time per encounter. And provider turnover following a takeover might disrupt longstanding relationships between the physicians and the community

In this environment, physicians and groups need to remember that we are known by the company we keep. We need to send a message that not all management companies are interchangeable. We have an ethical responsibility to demand that our hospital partners consider not only the short-term bottom line but also what's best for patients. Most importantly, if we always do what's best for the patient, we will almost certainly be doing things in the most cost-effective and efficient manner. And by definition, we will be doing what's best for the hospital in the long run as well.

This could mean facing tough decisions. If patient care seems likely to suffer under the demands of the new management, do we really want to be part of that problem? In some cases, it might be more ethical to take our practice elsewhere — even if it means ending a long-term relationship. In the big picture of things, our reputation is our greatest asset and marketing tool.

Lest I overstate my case, I should add that money does matter. A hospital can't fulfill its mission or do any good for patients if it doesn't have enough revenue to stay in business. However, quality is also an investment. Great care is far more visible to patients than behind-the-scenes finances. It's the backbone of loyalty and reputation.

In choosing our partners, we can never go wrong by following one simple principle: When we do what's best for our patients, everything else — including the finances — will fall into place. The best care is always efficient, evidence-based, coordinated and delivered with genuine concern for the person — all of which further the goals of population management. The best hospitals and health systems realize this and create environments where great care flourishes.

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