Columns: Explanation of Benefits

Say Yes To Population Health

Four ways employers can support efforts to improve overall community health.

Say Yes To Population Health

It’s said that when you have your health, you have everything. And when you don’t, nothing else matters.

Applying that wisdom to your business, if you have healthy employees, you have everything—i.e., productivity. And if you have a healthy community, you have a healthy labor pool from which to draw healthy workers who will give you everything—i.e., productivity.

If you agree with this argument, you and your business will be happy about the arrival of something called “population health management” in your community. It’s coming courtesy of your local health insurance plans and health care providers.

Population health is kind of like public health, but better. Public health focuses on mitigating immediate health risks to the public—like bad potato salad being sold at the county fair. That’s bad as in salmonella poisoning. Hospitals and doctors would report cases of salmonella poisoning to their local public health officials, who would investigate the source and take the appropriate steps to end the outbreak.

Population health is about keeping healthy people healthy and keeping people with chronic medical conditions as healthy as possible. Population health would encourage healthy people to choose a potato salad recipe with healthier ingredients—for instance, the one with vinegar instead of mayo. And it would work with obese people suffering from high blood pressure and diabetes to avoid potato salad altogether.

Population health found an early following in the Twin Cities. Providers here have long recognized the medical and financial benefits of keeping people as healthy as possible and away from their doors, which is not your typical health care business model.

In 2013, for instance, Hennepin County Medical Center received the Gage Award for Improving Population Health from the National Association of Public Hospitals for HCMC’s Coordinated Care Center program (bit.ly/1MsAZXa). The program identifies and addresses the health needs of at-risk patients and reduces ER visits and hospital stays.

More recently, Park Nicollet Health Services, Fairview Health Services and the Greater Twin Cities United Way were featured in the “Going Beyond Clinical Walls” series of reports from the Institute for Clinical Systems Improvement and the Robert Wood Johnson Foundation. They were recognized for sharing information that identifies gaps in mental health services that often lead to avoidable trips to the ER and hospital (bit.ly/1JhRq7Z).

Population health management is the task of managing the health of a group of people. It’s coming to your community in the form of value-based reimbursement contracts between health plans and health care providers. Hospitals and doctors assume the clinical and financial risk for the overall health of a patient population in a given geographic area. Typically, the health plans will pay the providers a fixed amount per person under the contract for all the health care services that each person may need during a specified period. The arrangements incentivize providers to keep the patients under contract as healthy as possible. Specifically, that means eliminating avoidable visits to the doctor and trips to the hospital. High-cost office visits and hospitalizations eat up profit margins pretty quickly.

Employers should consider taking steps to support population health generally and population health management specifically. Among such actions:

  • Expand benefits to cover prevention programs that target chronic medical conditions.
  • Incentivize workers to take advantage of chronic care management programs and participate in the programs that will help them better manage chronic medical conditions that may keep them off the job.
  • Find local plans and providers engaged in population health management and get in on the action.
  • Large employers with space and resources may want to consider opening an on-site health clinic.

Good health is good business. Promote population health in your community. TCB

Short Take

With more people having health coverage thanks to the individual and employer mandates under the Patient Protection and Affordable Care Act, the level of uncompensated care provided by hospitals and doctors should go down. Uncompensated care is the combination of charity care, which is care given with no expectation of payment, and bad debt, which is care given for which payment was expected but not received. Hospitals provided $46.4 billion in uncompensated care in 2013, according to the latest data from the American Hospital Association. For tax-exempt, nonprofit hospitals, giving care to those who can’t pay is one way they justify their exemption from federal, state and local taxes. How much is that exemption worth?

  • A study in Health Affairs set the national value at $24.6 billion in 2011 (bit.ly/1Sp3kPw).
  • In Minnesota, the exemption was worth $685 million: $378 million in federal taxes and $307 million in various state taxes.

With uncompensated care expected to decline, the study suggested community health improvement, or population health, be recognized as a measure of hospitals’ community benefit contribution to justify billions in tax breaks. Hmmm. Tax revenue or healthier employees?


In the April column, we talked about the push to pay for medical care based on value (value-based reimbursement) instead of volume (fee for service). The shove is from health plans that want to reduce what they pay out in claims while at the same time charging higher premiums for better care. That’s margin, baby. We pondered, what’s the value in value for employers (bit.ly/1dy701u)? A new health policy brief on value-based insurance products from the Brookings Institution understated it this way: “Given years of extreme concerns about the cost of care, purchasers and their brokers have been skeptical of reforms that might seem to require them to pay more to get better value, or to pay more for fewer services.” The brief offers employers a script from which they could ask pointed questions of their health plans when they’re pitching value-based coverage. The 22-page paper outlines the features of a model value-based insurance product that Brookings says would make everyone happy: more revenue for plans, better quality and higher margins for providers, higher-value care for patients and lower costs for employers. Among the features are per-member, per-month payments for primary care, bundled payments to providers for medical procedures and shared savings with providers that meet quality and cost goals. A must-read before your health plan uses the word “value” at contract renewal time.

David Burda (twitter.com/@davidrburda, dburda@msp-c.com) is editorial director, health care strategies, for MSP-C, where he serves as the chief health care content strategist and health care subject matter expert.


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