What is Population Health? In simplest terms, Population Health is just what it says: providing for the health of a population. This is the work of Public Health Departments and is also what insurance companies have aimed to provide. In the context of healthcare reform, what we mean by Population Health is for healthcare provider organizations (healthcare systems, hospital organizations, physician groups) to take on the financial accountability for the health of a population. A payer, such as a health insurance plan, contracts with a provider organization to pay a set dollar amount for a covered population (such as a group of employees). The provider organization accepts financial accountability for the health of the population. A covered population can also be a defined group of Medicare or Medicaid beneficiaries, where the provider organization takes on financial accountability for members of the group. In this instance, the government will typically pay an insurance company a set amount of money for a given list of individuals. The insurance company then in turn contracts with providers (typically a healthcare system) to accept accountability for the health of all the individuals in the population.
Who will Population Health help? If done well, Population Health will benefit everyone: individuals within the population, physicians who participate in these models, hospitals, and those who pay the bills, whether that is taxpayers (for government programs) or employers and individuals (for commercial insurance). All may benefit because this model aims to truly improve the health of the individuals included in the population—and to do it more cost-effectively compared to the current fee-for-service model.
How will Population Health deliver on these promises? In and of itself, a provider organization’s adoption of a Population Health model does not necessarily mean much. Two additional elements must be in place for the model to realize its enormous potential of better health, better care, and greater affordability. First, the provider organization must be thoroughly committed to achieving these aims and not merely see Population Health as a model to generate more revenue. Second, the provider organization will have to develop and deploy a challenging set of new competencies.
In the Population Health model, patients will have more effective support to keep themselves healthy and to manage chronic illnesses. Also, the definition of “patient” will expand to include participants before they have a healthcare need. This will both improve health and save money. Physicians will have convenient access to more data — including costs and a more complete view of the patient’s care history among different providers, hospitals, and clinics. This will enable them to treat patients much more effectively across time and locations rather than being focused on a single visit or series of visits related to a particular medical problem. Additionally, physicians will be paid for helping patients optimize their health, versus the fee-for-service model, which pays providers based on the volume of services provided. The new model shifts the focus to the quality of care and the outcome of better health, rather than on the quantity of care.
Conclusion: Is Population Health the Holy Grail? Not necessarily. Adopting such an approach requires a lot of work and a lot of change for healthcare organizations. But for those committed to improving health and affordability, Population Health represents the most promising model.