With the transition to value-based payment, medical practices are aligning with accountable care organizations (ACOs) and clinically integrated networks (CINs) as a way for providers to remain in independent practice, while joining with like-minded clinicians to improve the experience, clinical and cost outcomes for their patients.
CINs and ACOs as enabling business structures to bring large groups of providers together to address the healthcare needs of a particular population in a given geography—usually via patients’ common health insurance coverage. As a CIN or ACO enters into a contractual relationship with a payer, such as the Centers for Medicare and Medicaid Services (CMS), a managed care plan or even directly with an employer, its providers seek to understand the collective disease burden, access issues and care needs of that population. Core competencies must be developed if these providers are going to be successful in managing the cost, quality and their patient’s experience of care.
A true population health support organization (PHSO) is an ideal fit in this dynamically evolving delivery landscape. It can serve as the operations backbone through which providers might develop and deploy new program resources meeting the needs of its patient population with scale and greater impact than working alone on such efforts.
Strategically, a PHSO aims to integrate providers, hospitals, payers and services across a continuum of patient care. The interoperability between each of the entities reduces fragmented patient care and serves as a bridge between healthcare silos.
A PHSO is a key platform for helping providers transition into the new world of medicine by providing infrastructure for physicians to reshape and drive patient-centered care and engagement via efficient management of patient populations. It is a sound structure for those starting and maintaining a CIN, or simply for those managing medical practices that are evolving to meet the demands of a future delivery system. Much like management service organizations (MSOs) of the past, a well-designed PHSO may also support physicians who wish to remain and thrive in private practice but still collaborate with other providers across a continuum.
Setting the Performance Management Foundation
The key differences of a traditional MSO versus a new-era PHSO relate to the breadth of capabilities that are focused on managing clinical and cost needs of a defined population. Historically, a MSO would deliver common business services designed to help provider practices with administrative burden or provide scale effect for managing overhead costs. As a result, the scope of a MSO’s service offerings would be narrow and cover offerings such as group purchasing, credentialing, office management or centralized billing services.
The additional objectives of a PHSO are three-fold:
- Support physicians in quality improvement;
- Offer sound financial management; and
- Develop the infrastructure needed for population health.
These include moving the needle on quality measures and outcome performance, controlling total cost of care and providing improved patient access to medical care.
The goal is to improve patient loyalty and experience, ultimately keeping patients in an organized system of care. A PHSO also acts as an aggregator of key patient and administrative data so it might become the conduit for a transfer of knowledge critical to success in managing the health of populations.
Quality improvement initiatives must be grounded in a firm understanding of current performance by providers related to the key measures negotiated with managed care payers in a performance contract. Contracts that use shared savings, pay for performance, partial or capitated risk related to utilization and cost targets reward physicians and other providers only when specific measures can be calculated and action can be taken en-masse to have a positive impact on those measures.
Aggregating care delivery data across a network of participating providers is critical. A foundational capability of a PHSO must be deploying the information technology and analytics systems required to determine how care is currently delivered across a network. IT solutions that integrate claims-based data provide the first level of visibility regarding missing or over-utilized services. Such data could bring to light missing services and identify patients with complex or polychronic conditions who may benefit from additional care management.
Patient-centered care needs to augment this view of historical services with a forward-looking perspective to inform an individual plan of care. Care plans which truly engage patients will consolidate to the best extent possible, a whole-person view of the patient’s situation, integrating medical record data, diagnostic results, medications, procedures and clinical interventions into a longitudinal record. Each provider involved in caring for a patient needs to be able to see what other care is being provided to a patient in different care settings, and document the services they provided the patient, therefore, playing their role in furthering the objectives of a care plan.
Sound financial management of healthcare resources should be placed in the hands of clinicians; the historical adage regarding the power of the pen (i.e., a physician’s ability to prescribe, order services or procedures) is just as true and important today if healthcare costs are to be managed effectively.
The backbone of core services that a provider needs to manage healthcare costs must be informed by a holistic view of the cost associated with an individual’s care. In this context, the role of the PHSO is to present to the provider, at the point of care, key data elements to help ensure the best clinical decision is made for a patient, in the most cost-effective manner. A PHSO fills this role by pulling together data on care provided, aligning those elements to the patient’s care plan and then giving providers and patients relevant cost information to help support making the right decision.
Common examples of where integrating cost and clinical data points are essential if a provider hopes to serve the best interest of a patient and performance expectations of value-based contracting. They include forecasting an appropriate length of stay, understanding the appropriateness of prescribing a generic drug, preventing duplicative and expensiver diagnostic tests or directing a patient to a lower cost site of care, such as an ambulatory surgery or urgent care center.
The infrastructure developed through a PHSO should reflect current capability gaps of the providers to be served. The assessment of provider needs and existing methods to manage and report upon clinical and cost performance at network/ population and provider/patient levels serves as a baseline around which new common services should be developed.
In some organizations, understanding and providing visibility to the variability of how care is provided within a network now might be the most valuable information. For other organizations, the ability to stratify a population to identify those most in need of care management and care coordination might provide the best return. The unique needs of provider practices, hospitals and patients served by a network have to be the basis around which a PHSO’s infrastructure, staff, expertise, programs and technologies are scoped and designed over time.
The strategic vision for the infrastructure services should have a multi-year implementation and scalability plan to ensure financial investments are spread out and are prioritized based on goals of the network and its timing for moving into value-based payments for population health management.
PHSO vs. MSO
The PHSO is a vehicle to connect all the dots for a transformation from the old fee-for-service to the new value-based payment models. There are many benefits to organizing and operating a PHSO to support this transition, including:
- Integrating physicians with an organized delivery system of care, which supports ACO and CIN initiatives.
- Creating a mechanism to aggregate a holistic view of care provided to a patient across a continuum of care and integrating that view for all providers involved in a patient’s care
- Coordinating the care management services across a continuum and managing transitions of care between settings.
- Providing a contracting vehicle that allows and supports providers to assume risk and manage it effectively.
- Being the collaborative forum for clinicians to develop care pathways, protocols and patient-centered care management programs to bring role clarity and coordination to the many individuals who might be involved in a patient’s care.
- Enhancing system interoperability to exchange and share data among providers to support care delivery,
- Improving financial performance and managing the complexities of practice management.
- Ensuring compliance with CMS programs, such as MACRA, and avoiding payment reductions.
- Supporting consumerism by creating a unified brand focused on consumer experience and loyalty.
- Managing revenue cycle and coding processes (i.e., diagnosis coding, chronic care management requirements, hierarchical condition categories/risk adjustment factor to support value-based contracts.
- Providing education to physicians—both employed and independent—on topics, such as industry trends, leadership and care redesign.
Whether physicians are employed or independent, a PHSO can support them equally while providing a vehicle for improved operational and financial performance.
Where to Begin
Systems should begin by assessing their employed medical groups and conducting outreach to independent, affiliated practices to determine needs, timing of a value-based transition and identification of gaps. An existing CIN, ACO or MSO could evolve to become a PHSO.
The key to success is either designing a new or adapting an existing organization to fill identified gaps of support services necessary for success under changing reimbursement and care delivery models.
Lastly, a PHSO can be used to gain new relationships while strengthening existing ones with physicians. These partnerships will allow organizations to ultimately improve the health of populations they manage through joint investment in common infrastructure, technologies and staff resources.
The healthcare delivery system and corresponding reimbursement models are undergoing significant change that is unlikely to slow down. The old ways to practice medicine will no longer work in the world of a value-based payment system. A transformation of current practice structure, business strategy and partnerships along a continuum of care will play key roles in achieving success in the new healthcare delivery model.