Welcome to the Era of Population Health

A new year is a great time to take a new look at the Patient Protection and Afforable Care Act (ACA) passed two years ago, whose initial provisions came into effect this past year. In my own (admittedly amateur) view, the provisions of the ACA can be boiled down to three purposes:

  1. Expanding insurance coverage: individual mandate, no pre-existing conditions, expanded Medicaid eligibility, sliding scale subsidies for families up to 400% of the poverty line, dependents allowed to stay on parents’ insurance until 26. Altogether, these provisons are expected to provide coverage to 30 million uninsured Americans, leaving about 20 million uninsured (about half of which are undocumented immigrants).
  2. Improving quality of insurance: no rescinding coverage, no annual or lifetime caps, elimination of the Medicare Part D donut hole, limited deductibles, requirements on the minimum amount spent on medical care improvement, and the creation of health insurance exchanges to hopefully drive competition in the insurance market.
  3. Encouraging prevention and efficacy: creation of a number of prevention and efficacy-oriented research centers, no copayments or deductibles for an “essential benefits package” of preventive measures, the creation of “accountable care organizations” (ACOs).

The law’s potential to expand coverage is pretty clear. Less clear is whether it will be effective in controlling costs and improving care in the long run. In theory, the new regulatory requirements should exert pressures on both public insurance programs (Medicare, Medicaid) and private insurance companies to alter reimbursement policies, which in turn incentivize providers to provide more high quality and cost-effective care. Key to this strategy are the new, often-hyped ACOs—networks of providers which can earn “shared savings” from the government for reaching quality targets while using less resources.

However, this gritty, down-to-earth case study of one hospital’s experience with managed care shows that with each new innovative incentive strategy employed by managed care organizations (discounted pricing, diagnosis-related groups, capitation), providers responded in kind (they are smart people, after all) to elude a silver bullet that would grant both cost savings AND improved quality of care. Ultimately, it may be the case that performance risk is incredibly difficult to manage. We can play with incentives all we want but if providers knew of an easy way to reduce costs while providing better quality care, they probably would have done it already.

So in this upcoming year (and beyond), I’m pinning my hopes for fundamental health care change in this country on two things. First, with the health reform law’s creation of a number of research institutes such as the Patient-Centered Outcomes Research Institute, perhaps providers will soon have access to rigorously evaluated data that shows them which treatments and protocols are most effective and efficient in improving health outcomes (don’t call it health care rationing…call it health care “rationalizing”). The second thing, which appears to be less on the health reform radar, is a model of health care delivery that could be called “community-based health care”. (I made that term up because I can’t seem to find a single buzzword term used to define these types of models.) Exemplified by organizations such as the Commonwealth Care Alliance in Boston and the Camden Coalition of Healthcare Providers, these models ally primary care physicians and specialists with nurses, home health aides, behavioral health specialists, and social workers to create a team of providers that works to address all barriers patients face in accessing high quality care, both internal (such as poor care coordination and hospital-induced infections) and external (such as stresses of daily living and not being able to read the label on the prescription). Such strategies can be especially effective for the most complex and expensive patient populations, such as “dual eligibles”, people who are eligible for both Medicare (because they are old or have disabilities) and Medicaid (because they are low-income). Comprising about 10% of the combined Medicare-Medicaid population but 40% of the costs, and often experiencing poor health outcomes, these patients could be a powerful starting point for driving down overall health care costs while improving quality of care for a population that has traditionally been overlooked. In a week, I will be shadowing an alum of my school who heads such a community-based managed care organization serving Rhode Island Medicaid patients (Neighborhood Health Plan of Rhode Island), to catch a first-hand glimpse of how such organizations improve quality of care and drive down costs with a coordinated, team-based approach.

In summary, as pressures are placed upon providers to keep patients out of the hospital, the field of medicine may become a lot less lucrative. Welcome to the era of population health.

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