UCHealth population health strategy takes shape

Insurance offerings, narrow networks, and bundled payments lead the way
December 16th, 2015

As the U.S. health care system’s emphasis continues to shift from volume to value, UCHealth is putting its weight behind population health.

It’s about managing large groups of patients with standardized care that aims to control costs while improving outcomes and patient and provider satisfaction. It’s an alternative to the long-entrenched fee-for-service (FFS) system, which rewards hospitals and other providers for volume rather than the value of the services that they provide. That, in turn, has encouraged fragmented care that critics say increases costs without improving quality.

Like other health care systems, UCHealth and its hospitals have spent time and resources the past several years responding to efforts by the Centers for Medicare and Medicaid Services (CMS) and some commercial payers to shift to an environment where payment is increasingly based on performance in areas such as reducing hospital-acquired infections and 30-day readmission rates, meeting evidence-based standards of care, and upgrading patients’ hospital experience. The approach, dubbed value-based purchasing, imposes penalties on hospitals that fail to meet CMS standards in these and other areas.

The assumption behind population health is that with access to large numbers of patients and information about them, hospitals and health systems will be able to make evidence- based decisions about the best methods for managing their care. That includes preventing illness and injury as well as effectively treating patients with chronic diseases like diabetes and heart failure, which consume a large portion of the health care dollar. But it’s difficult to develop a population health strategy without a large population, and therein lies a key component of UCHealth’s strategy.

Network news

Starting Jan. 1, 2016, UCHealth will be part of a new health care network that also includes University Physicians, Inc.; the CU School of Medicine; Children’s Hospital Colorado, Colorado Pediatric Partners; Denver Health; and The Little Clinics. The plan, dubbed HighPoint Denver Plus, offers both a traditional deductible and a high-deductible health plan available to employees of the City and County of Denver and of Denver Health – a combined population of more than 12,000 employees and more than  25,000 covered lives.

In addition, UCHealth announced in late October that it joined with Anthem and the CU School of Medicine to offer a Medicare Advantage (MA) plan in Denver and Douglas counties. The plan provides extra medical and pharmacy benefits above and beyond what “original” Medicare offers. It’s also available to individuals who are eligible for both Medicare and Medicaid.

These moves supplement UCHealth’s established presence in the restricted, or “narrow network” of providers developed by Anthem, the largest health care payer in Colorado. Gaining access to large numbers of patients who have a strong incentive to seek care within a network is a fundamental necessity of population health, said Jean Haynes, chief population health officer for UCHealth.

“We need to be able to reach out proactively to those who select us,” Haynes said. With an established enrollee base tracked through UCHealth’s Epic electronic health record, providers can identify “where on the health care continuum patients fall,” Haynes said.

On one hand, that means helping patients with chronic disease manage their conditions and reduce their risk and on the other encouraging patients who are already healthy to stay that way with screenings and other preventive measures, Haynes said.

Extended care

A basic goal of population health is to direct patients whenever possible to primary care providers in patient-centered medical homes (PCMHs) built to coordinate medical and behavioral care and other services. That strategy began more than four years ago at University of Colorado Hospital, where all family and internal medicine clinics have earned Level 3 PCMH accreditation from the NCQA (National Committee for Quality Assurance).

But having UCH as an anchor for academic medicine as well as the Colorado Health Medical Group’s community physicians, UCHealth also has the ability to manage its patient populations beyond the primary care setting, Haynes said. “For those who need advanced care, we’ve built a comprehensive network of specialty care,” she said.

In addition, UCHealth has built or acquired facilities across the Front Range to give patients access to care in their own communities, Haynes said. She cited a new cancer center built for UCHealth Northern Colorado in Fort Collins as one example.

Narrow networks restrict patient choice, Haynes acknowledged, but population health is difficult, if not impossible, in an open system. The advantages of an integrated health record – opportunities to developed standardized treatment protocols, reductions in duplicated tests and services, and so on – are greatly diminished if patients move freely between providers.

“We can’t address population health without standards of care,” Haynes said. “We have to have every touch point for patients within the system and the network. That’s a great approach to addressing their health needs, but if they go outside the network, we will never know.”

Payer play

Another important piece of UCHealth’s population health strategy is developing positive relationships with insurers, said Kelly Henry, senior director of payer strategies and value based contracting for UCHealth. For many years, Henry said, relationships with payers and providers were largely adversarial, with one side focused on reducing utilization and the other intent on maximizing reimbursement. In an era of skyrocketing costs and increasing demand for services from a growing number of newly insured people, the equation is changing, she said.

Today, Henry said, more payers, hospitals and physicians are seeking ways to work together toward the common goal of improving outcomes and patient satisfaction while controlling costs.  For example, she said, a payer might make a reimbursement increase contingent on providers meeting goals for improving quality of care, increasing patient satisfaction, and reducing the cost of care.

These kinds of “patient-centric” arrangements are designed not only to “change the economics of agreements” between the parties but also to meet the goals of population health, Henry said. Tying outcome measures to reimbursement encourages physicians and hospitals to “maximize their use of innovative techniques” to gather data they can use “to take action with their patients,” such as encouraging regular screenings, medication compliance, lifestyle changes, and so on, she added.

The idea ultimately is that  maximizing performance in these arrangements and building long-term payer partnerships will complement UCHealth’s growth goals, Henry said. She emphasized that “value” doesn’t equate solely to short-term costs, but rather to more sophisticated analysis of how health care resources are allocated and the outcomes they produce.

“Population health is about getting patients the right care at the right time and in the right place,” Henry said. “All of that impacts the cost of care. To be a good partner with payers, we have to bring affordability to the picture, but not just by reducing reimbursement rates. It means taking a fresh look at standards of care and economies of scale. Standardizing care when appropriate could allow us to reduce costs without sacrificing quality.”

Bundle up

Developing standards of care across the health care system is the basic goal of CMS’s bundled payment initiative, which after a series of delays is now set to launch in April 2016. The initial program, in which UCH will participate, focuses on knee and hip replacements.

The details are complex, but the “Comprehensive Care for Joint Replacement Model,” or CJR, aims for CMS to provide participating hospitals with an average market payment for a replacement procedure. The hospital will then be expected to manage the patient for a 90-day episode of care. If the costs for that period exceed the bundled payment, the hospital will have to return money to CMS; if the costs are lower than the payment, the hospital will receive additional money from CMS.

“This is the first of what we think will be many bundled payment arrangements for chronic diseases with high costs, such as congestive heart failure and COPD,” said Tom Gronow, chief operating officer for UCH.

The challenge of managing bundled payments will be twofold, Gronow added. First, the hospital will need to coordinate care for patients while they are in the facility. This will involve “prehab” for patients for whom nonsurgical options, such as physical and occupational therapy and injections, are not appropriate. Surgical candidates, Gronow said, will need discharge planning at the front end to ensure they receive education about their procedure and are set up with needed services, such as home health care or skilled nursing care, after they leave the hospital.

Second, hospitals will be responsible for the cost of care for CJR patients wherever they receive it, Gronow said, so it will be imperative to establish strong relationships with community providers, such as long-term acute-care and skilled nursing facilities.

“We need to understand their philosophies of care,” Gronow said. “Do they have a broad payer mix? What are their outcomes? Are they transparent with their data? What happens with patients we send them is all calculated into the cost.”

UCH began that process early last year by developing partnerships with long-term care providers Vivage Quality Health Partners and Kindred Healthcare. Gronow described the relationships as “solid,” but noted that challenges remain in building an information infrastructure that would give the hospital access to cost data from across the entire continuum of care.

Indeed, information sharing between facilities is another key to population health, Haynes said. “Bundling is a great example of the fact that we are no longer responsible for patients only within the four walls of the facility,” she said. “We are in the process of building a clinically integrated network to ensure patients will do well post-discharge.”

Beyond medical care

There are many routes to clinical integration. A good example – and a contrast to the bundling approach – is the budding effort to integrate medical and behavioral health care, which is the product of a growing understanding that the long-time policy of isolating the two has been wasteful and ineffective.

In recognition of that, the state of Colorado received $65 million in federal funds for a State Innovation Model (SIM) grant to integrate mental health services in primary care physician offices. Some of those funds figure to help UCH, the CU Department of Family Medicine, and the Center for Dependency, Addiction and Rehabilitation (CeDAR) build a behavioral health service line – an effort that began last summer.

Population health management ultimately requires many strategies, Gronow said. The approaches to treating knee-replacement patients and heart failure patients will differ. Alternative therapies, telehealth, diet, exercise, depression and substance use disorder treatments, and many more will have to be stirred into the mix in various proportions. New relationships between hospitals and the community will have to be nurtured.

“It all links back to patient care and satisfaction,” Henry said. “Let’s not just ratchet down prices. Let’s talk about efficiencies and patient care. A lot of times, the outcome of improved patient care is reduced costs.”

About the author

Tyler Smith has been a health care writer, with a focus on hospitals, since 1996. He served as a writer and editor for the Marketing and Communications team at University of Colorado Hospital and UCHealth from 2007 to 2017. More recently, he has reported for and contributed stories to the University of Colorado School of Medicine, the Colorado School of Public Health and the Colorado Bioscience Association.