A fascinating business dynamic will unfold as health care providers in the United States shift from a reimbursement system that has historically paid for procedures performed to one that rewards population health — providing the total care of a community at a fixed cost and improving its members overall health.
This means that to a significant degree historic areas of revenue generation will become generators of losses. While it’s common in most for-profit and nonprofit businesses for centers of revenue generation to fluctuate in their productivity, a shift of this scale represents a sea change for the health care sector that it must face head-on. The concept is especially applicable to high-cost patients, sometimes referred to as “hotspotters.” In the United States, the top 1% of high-cost patients
consumes a disproportionate 28% of total health care costs, and the top 5% of high-cost patients consumes more than 50%.
One reason for this phenomenon is that these patients, while costly, are also the source of a substantial amount of revenue and contribution margin. In today’s health care market, providers — hospitals, physicians, surgery centers, clinics — are paid for volume. And this comparatively small subset of patients is the source of extraordinary amounts of volume. We know, for instance, that hotspotters visit our system 41 times over a five-year period, on average, compared to six times for the average patient. As health care reform rolls forward and provider incentives move towards fixed payments, these high-cost and high-utilizing patients will become the five-alarm fire for all care providers for one simple reason: There will be no commensurate revenue offset. In the foreseeable future, what was once a profitable or breakeven proposition will become a significant financial liability.
At Intermountain Healthcare, we are proactively changing the way we provide care for high-cost patients. A nonprofit serving Utah and southern Idaho, Intermountain has a network of 22 hospitals and 185 clinics and employs 1,000 physicians and more than 34,000 employees in total.
Although we have much ground still to cover, we have vastly improved our understanding of high-cost patient characteristics, accumulated extensive knowledge of hotspotter perceptions from a comprehensive survey that we recently conducted, and learned about optimal organizational structures required to realize change.
As the largest health care provider in Utah, Intermountain has always had an enhanced commitment to population health. The answers to these core questions serve as our compass: What is best for our patients and the community we serve? And, how can we provide the highest quality care at the lowest appropriate cost?
These questions are at the heart of why Intermountain is so interested in addressing the current challenges of high-cost patients, and we have invested substantive efforts and resources in learning more about them. Our findings include the following:
• One percent of Intermountain’s patients used 24% of the total amount we spent on patient care between 2008 and 2012.
• Five percent of Intermountain’s patients consumed almost 51% of our total costs over the same time period.
• High-cost patients experience high rates of turnover. Less than 10% of the top 1% of high-cost patients remain in that category the following year, and less than 0.5% of these same patients remain in that category for five consecutive years.
• The top 1% of high-cost patients has a 75:25 split of adult:pediatric patients. (Intermountain has an entirely different team looking at high-cost pediatric patients.)
• The top 1% of high-cost patients experiences a mortality rate of 26% over a five-year period.
The unfortunate reality is that despite all the frequent and costly care these patients receive, they’re not necessarily always getting well. While clearly a work in progress, here are some lessons learned about our top 1% of high-cost patients:
Understanding the patient perspective is an essential part of identifying potential solutions. Over the past six months, we completed a comprehensive survey of our high-cost patients to learn and understand more about their experiences and perceptions. Some of the findings were expected, but others were surprising.
Among the expected findings were the following: Patients said their care is not well coordinated and that they need more help to understand and follow up on their complex care plans. Although grateful for the care they received, they most often described their quality of life as fair to poor.
We were surprised to learn that by almost a 2-to-1 margin patients attributed themselves, not the care they received, as the more significant impediment to their improvement. Fifty-seven percent indicated lack of self-care as a contributing factor, and an even higher percentage (63%) identified depression or other mental health concerns. The findings reveal the critical need for self-care educational and motivational assistance in addition to improvement of system structure and processes.
The good news is we can analyze our care for these patients and develop ways to improve their care while potentially reducing its costs — which is precisely what we are attempting now. Almost all of our high utilizers have a chronic disease and many have several:
• Seventy-seven percent have at least one of these chronic conditions: cardiovascular, mental illness, lung disease, renal disease, diabetes, liver disease, cancer, stroke, or some kind of paralysis;
• Forty-six percent have two or more of those conditions;
• Twenty-three percent have three or more of those conditions.
For almost all of them, a major problem is following the ever-growing list of recommendations from all the specialists they see; it is more than most can do.
Numerous and varied targeted interventions will be required to address the different subgroups of the top 1% of high-cost patients. The organizational challenge we face is that the top 1% of our patients represents about 20,000 patients — a large population to tackle at once.
We know, for instance, there were 89 patients who remained in our top one percent of high-cost patients for five consecutive years. Those 89 patients consumed approximately $40 million in care. Almost $11 million, or over a quarter of the total, was related to renal care. We learned that three clinic sites in the system providing dialysis care were responsible for the majority of cost.
This kind of analysis provides actionable information, which can result in changes to the provision of care. In addition to bringing transparency to the care and disproportionate costs associated with a small number of patients, the analysis triggered in-depth case management review, which revealed some waste as well as confirmation of appropriate care. Some patients had numerous attending physicians whose care was poorly coordinated between providers. In some cases, there was no point person or coordinator and specialists were not communicating sufficiently. In other cases, data revealed that costs were driven by extraordinarily high medication costs that were medically necessary and represented life-sustaining treatment.
Surprisingly, end-of-life care was not a significant factor, accounting for approximately 8% (last six months of life), and 12% (last year of life), respectively, of all costs incurred by the top 5% of high-cost patients.
Appropriate organizational structure is imperative to realizing change. We learned more about the organizational structures required to implement change across a large, integrated, health care operation. Each hotspotting committee has a charter, which is a frequently updated document that describes its purpose, participants, scope, decision-making authority, and objectives.
Initially, we created a steering committee comprised of key stakeholders, including representatives from our central headquarters, senior doctors from our medical group, officials from SelectHealth (our integrated health insurance provider), and leaders of various operating areas. This committee provides valuable input into our efforts as well as vital channels for information sharing across the system. The sheer number of concurrent system initiatives addressing the redesign of care requires extensive coordination and collaboration. Without it, we duplicate resources, waste time and confuse patients with overlapping programs. This group has provided us greater uniformity in how we approach the complex challenges of improving care for high-cost patients.
Soon thereafter, we established a “hotspotting” executive committee, which provides executive sponsorship, direction, and orchestration of analysis and implementation efforts system-wide. This committee is comprised of a half-dozen senior leaders, including Intermountain’s vice president for health care transformation and vice president of clinical operations, who is also our chief nursing officer. One of the revelations of the first year of our efforts was that executive ownership and sponsorship are essential to making substantive change. In this era of reform, there are so many competing programs and initiatives for limited resources that programs lacking executive sponsors often can’t warrant the attention necessary to succeed.
Finally, we created a “hotspotting” analytics committee — comprised entirely of analysts — to broaden our understanding of how the high-utilizing patient population is being served: the characteristics of their health conditions; the nature and extent of their care (including where it was provided and by whom); and the effectiveness of its coordination. The contributions of these analysts to our efforts to redesign care processes cannot be overstated. They provide the bulk of support for complementary committees across the system dedicated to redesigning care processes. Their expertise is helping to generate uniquely valuable insights. (For example, the coding we use to identify high-cost patients and subsets of that segment is pages long.) Our analysts maintain data integrity across the organization and prevent the respective committees from duplicating efforts.
We now have two pilot projects in the works that will help us better serve the 5% of our patients who use so many services.
• An integrated-care-management pilot will aid us in refining our overall strategy for managing adult care. It will help us use best practices more effectively, improve the way we manage transitions and handoffs between providers, prevent unnecessary emergency department admissions, and increase our coordination with community resources.
• A special-care-clinic pilot located centrally in Salt Lake City is designed to assist the whole person and not just specific medical conditions. The clinic will provide personalized adult primary care to help high-utilizing patients increase their access to services like primary care, home health, mental health, and medication management.
We anticipate launching additional pilot projects designed for future hotspotter subgroups.
We’ve demonstrated historically that when we implement evidence-based practices, we not only improve clinical outcomes but also do so at a lower overall cost to the community. That’s the key to making reimbursement for population health work. It’s not restricting care to reduce costs, because restricting care leads to worse outcomes. It’s focusing on the outcomes.
In a very real way, those who were initially seen as the problem, point the way to making population health work. The key is outcomes, which is what health care should have been about all along.
Article was originally posted on http://blogs.hbr.org/2013/11/tackling-the-hotspotter-patient-challenge/