Building a Value Model for Population Health Management

By Daniel J. Marino, MBA, MHA, Executive Vice President, GE Healthcare Camden Group

Most healthcare leaders understand the importance of managing the health of their patient populations. Building the tools for effective patient population management is key to improving outcomes while “bending the cost curve” in U.S. healthcare.

At the same time, executives are concerned about the cost of population health initiatives. What level of investment is needed to effect change? What is the right pace for transitioning from fee-for-service (FFS) to value-based payment? Finance leaders, in particular, are concerned about preserving margins during the transition.

How can a healthcare organization maintain profitability as spending increases on population health initiatives while FFS revenue decreases?The only way to answer these questions is to use a data-driven “value model” to predict and manage the total financial impact of the population health initiatives.

An ideal value model will accomplish three goals:

  1. Quantify the output of population health interventions, including shifts in utilization and changes in cost of care.
  2. Help identify population health investments that will move the organization forward while retaining margin.
  3. Allow finance leaders to support value-based contracting with predictions of costs and the quality of outcomes.

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