How to Assess the ROI of Your Population Health Initiative

How to Assess the ROI of Your
Population Health Initiative
– Bobbi Brown

© 2014 Health Catalyst
www.healthcatalyst.com
Proprietary. Feel free to share but we would appreciate a Health Catalyst citation.
Investing in Population Health Mgmt
In this brave new world of
value-based healthcare, it
shouldn’t come as a surprise
that investing in population
health management (PHM) is
a requirement for success.
The question becomes what
precisely to fund or how best
to measure the ROI of the
investment.

Investing in Population Health Mgmt
It is important to assess which
interventions bring the most
benefit and develop potential
ROI measures prior to making
any financial commitments.
Assessing the potential ROI
for investments in PHM, in a
clear, understandable
framework, can help
organizations systematically
identify and prioritize their
PHM investments.

Methods for Assessing PHM Investment
There is so much potential for
PHM that will positively impact
individual and entire populations
of patients.
Incentives are evolving and new
success measures are needed.
The terms covered lives and risk
stratification need to become
part of our everyday vocabulary.

Determining where to focus
resources with these questions:
• Does this investment help us grow?
• Does this strategy help us maintain
our margin?
• Are we balancing risk and reward?
• Does it make sense to build this
new tool/intervention ourselves, or
should we outsource?

Assessing which investments will
provide the best care for a given
population at an affordable rate is
rarely cut and dry.
It requires partnering with
physicians and clinicians to
understand the potential impact of
an intervention and the estimated
timeframe for the investment to
begin paying dividends.

One method of assessment is to create a matrix with cost
and quality, risk and reward, or cost and benefits.
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000
Remote monitoring
Care management
Public policy
Wellness Programs
COST
BENEFIT
Remote monitoring is the clear
winner in the cost vs. benefit
assessment with the lowest
cost and highest benefit.

Another methodology for ranking PHM interventions are
scoring sheets. The assessment criteria is listed in the
columns and potential investments are displayed in the rows.
Fit with
overall
strategy
Growth
potential
Positive
margin
impact
Value to
member
Total
Care
management
Remote
monitoring
Public policy
Wellness
programs
Each box is scored on a scale of 1-3, adding a weighting element to the assessment.

Criteria to Assess PHM Investments
Determining an organization’s
investment criteria in this new era
of PHM is absolutely essential.
These four overarching criteria
are a good starting point for
assessing PHM opportunities:
• Alignment with overall strategy
• Growth potential
• Positive margin impact
• Value to member

What is the nature, scope, and
purpose of the PHM strategy?
Does the proposed intervention
fit with the overarching strategy
of the organization?
Alignment with overall strategy

How will the intervention impact
growth?
Will it attract and engage patients?
Growth potential

What is the cost of the intervention?
What is the ROI?
Is there a potential for growth or
eliminating waste?
Positive margin impact

Will this intervention make a
positive difference in the quality
of care delivered and enhance
the patient experience?
Value to patient

An additional factor to consider is
diversification of the organization’s
PHM portfolio.
It’s too risky for most organizations
to invest all their resources in a
single strategy.
PHM provides the organization an
opportunity to employ multiple
interventions and pilot projects,
refining the processes over time.

Putting Assessment to the Test
There is no easy way to develop
and execute new PHM strategies.
There is, however, a simple way to
get started.
The following exercise was
designed by Health Catalyst for
scoring proposed interventions
which provides a starting point.
Assign a score from 1 to 5 (with 5
representing the greatest impact on
population health) for each of the
recommendations.

Provide care managers and
patient navigators
Many health plans provide a care
professional who help provide
services to assist patients and their
families cope with complicated
medical situations.
Patient navigators are the glue
between patients and providers.
Proposed intervention
SCORE

Provide advanced care planning
Ensure plan participants have a
clear understanding of advanced
care planning.
Assist patients in determining what
types of decisions need to be
made and encourage them to
consider those decisions before
they become necessary.
SCORE

Be active in public policy
Drive public policy and a national
recognition of Physician Assistants,
Nurse Practitioners, and Doctors of
Nursing Practice.
Providing them with proper
recognition and compensation will
assist in meeting the growing
demand for healthcare services.
SCORE

Evaluate all sites of care
Ensure appropriate reimbursement
for lower-cost treatment and
rehabilitation facilities, such as
in-home care and patient-centered
medical homes.
Ensure incentives are in place to
reward desired behavior.
SCORE

Sponsor internal employee
wellness programs
This could include education on
healthy eating habits, exercise
participation programs, and
automated analytics with data
capture through device integration.
SCORE

Remote monitoring
Invest in, and provide, remote
monitoring and care capabilities.
In-home tele-monitoring, video
conferencing, and pharmaceutical
automated medication dispensing
machines (where appropriate)
should be considered.
SCORE

Provide content, analytics, and
diffusion support
The services provided include
helping organizations to develop
and sustain evidence-based order
sets and protocols.
Analytic tools can provide ongoing
metrics and analysis to determine
the impact of interventions.
SCORE

Influence public policy regarding
payments for delivering value
(preventive care, reduced
readmissions) with no additional
monitoring and reporting
requirements.
Integrated IT systems, automated
metrics, and analytics with common
state and federal value/quality
definitions are a must for measuring
value and quality.
SCORE

Your ideas
Always look for interventions
specific to your situation when
looking for ways to improve PHM.
Score these along with the other
interventions.
SCORE

Conclusion
Investments in PHM offer the
potential for a profound ROI to the
organization.
It’s important to remember however,
not every PHM intervention applies
to every situation.
Assessing which interventions
deliver the greatest impact, as well
as determining when the
investment will begin paying
dividends, are crucial to achieving
success with PHM.

More about this topic
A Guide to Successful Outcomes using Population Health Analytics (White Paper)
- Health Catalyst
Population Health Outcomes: 3 Keys to Systematic Improvement
Paul Horstmeier – Senior Vice President
Understanding Population Health Management: A Diabetes Example
Michael Barton – Engagement Executive Vice President
Managing Half a Million Risk-Contracted Lives: Partners HealthCare Population Health
Strategy - Health Catalyst
How to Drive ROI in Your Healthcare Improvement Projects
Health Catalyst – Executive Report
Link to original article for a more in-depth discussion.
How to Assess the ROI of Your Population Health Initiative

For more information:

Bobbi Brown is the Vice President of Financial Engagement for Health Catalyst.
Ms. Brown started her healthcare career at Intermountain Healthcare supporting
clinical integration efforts before moving to Sutter Health and, later, Kaiser
Permanente, where she served as Vice President of Financial Planning and
Performance. Ms. Brown holds an MBA from the Thunderbird School of Global
Management as well as a BA in Spanish and Education from Misericordia University.
She regularly writes and teaches on finance-related healthcare topics.
Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com

How to Assess the ROI of Your Population Health Initiative

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