How might population health change with the future of health?

Health Care Current | October 8, 2019

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies, and provides updates and insights on policy, regulatory, and legislative changes.

My Take

How might population health change with the future of health?

By Sarah Thomas, managing director, Deloitte Center for Health Solutions, Deloitte Services LP

I recently returned from a population-health conference in Scottsdale where I highlighted Deloitte’s vision for the future of health. Some of the other speakers shared strategies they’ve used to reduce costs and improve health outcomes among their high-risk populations. We heard presentations on social determinants of health, opioid addiction and abuse, strategies for combining population health with behavioral health, and ideas to support older people who need long-term services. I was impressed with the success of these programs, but it was sobering to hear about the challenges some health systems and health plans continue to face when trying to combine data with change management. I also heard many of the same concerns I’ve been hearing for years around needing to demonstrate the return on investment (ROI) for population-health programs.

One of the most interesting sessions profiled a health system that is using artificial intelligence (AI) to sift through data to identify the highest-risk patients. Once identified, care teams proactively reach out to these patients with focused care management. It was interesting to hear that the program’s developers do not know exactly how the AI finds these high-risk patients.

Over the past year, Deloitte’s Center for Health Solutions has published a number of reports, blogs, and news items outlining our vision for the future of health and its likely impact on health industry stakeholders and outside organizations that are interested in moving into this space. My presentation went through a thought process of considering what the term population health might mean once the trends we see converging play out.

Here are a few of my thoughts on the challenges we face today, and where I expect we could be 20 years from now:

  1. The definition of health will likely change: Despite our growing knowledge around the drivers of health—and the fact that this knowledge is being integrated into population health—our industry remains largely focused on care. Population health is no different. The measures of success typically include reduced emergency-room (ER) visits, fewer readmissions, and better care quality. By 2040, we expect the definition of health will extend beyond physical and behavioral health to include spiritual, emotional, and even financial well-being. Similarly, the definition of population health will likely evolve along a similar path, and the measures of success and ROI will likely change with it.
  2. New data streams could help support population health: At best, today’s population-health professionals have access to claims data and medical records. Sometimes they also have access to data collected from individuals related to social determinants and their other health needs. We know that the data are often incomplete, sometimes not easily shared, and often lagging. Fast forward to 2040 when we expect radically interoperable data to be prevalent throughout the health system. Not only do I expect many of today’s challenges will have been solved, but I also foresee new data streams flowing into population-health programs. This could include genetic information, biome data, personal priorities for well-being, and an understanding of which behavioral-economics strategies are most motivating. I expect we will also gain deep insights into our health that have been generated by highly evolved AI technology. This information should be easy to understand and could be used to improve our health or maintain our well-being.
  3. The definition of success is likely to change, enabled by technology: The success of a population-health strategy is often measured by the number of frail high-needs individuals who are kept out of the ER. However, a patient’s overall satisfaction and confidence that they are okay should also be considered when evaluating these programs. In some cases, simple technologies like telephone services have helped support improved outcomes. In other cases, more sophisticated remote-monitoring technologies have been required to meet patient needs.

Consumers’ attitudes are likely to change vis-à-vis technology as well. When I talk about Deloitte’s vision for the future of health, there seems to be a perception that consumers—especially older and lower-income people—don’t want or can’t use technologies. But many of the stories I heard at this conference indicate that this is not really the case. Technology doesn’t replace a patient’s relationship with their clinicians. Rather, it supports the relationship.

I expect that by 2040, many more digital natives will rely on technology to get care that is coordinated, accessible, convenient, and effective. People who grew up surrounded by technology will likely use it proactively to spot potential health issues before they become symptomatic, which can mean less curative care will be needed. I also expect that population health will work with consumers’ maturing understanding of what contributes to their overall well-being.

It is fun to think about all of these potential implications. Here is a slide I shared during my session.

I spoke in-depth with some conference participants about what they thought the future will hold and how we might get from here to there. One group of population-health professionals said they work in rural areas where people they serve might be three hours away from any health care facility. Some of them do not have electricity in their homes, much less internet service (though they do often have cellphones). Although the people who attended my informal break-out session agreed that many aspects of our future-of-health vision are plausible, they wondered what a technology-dependent future might mean for rural populations.

While rural populations might be far from formal care settings, some people might live close to a grocery store or retailer. In the future, retail settings might become hubs for in-person and virtual health visits with clinicians. Given the growth of retail health activity, this idea was popular in my group.

Even when we see major changes in what we mean by health and what our industry works on, there likely will continue to be groups of people who face challenges. But I am seeing enough evidence of change already happening in consumers’ attitudes and expectations that I think we will see healthier populations in the future.

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In the News

President's executive order on Medicare includes Medicare Advantage

On October 3, the president signed an executive order urging the US Department of Health and Human Services (HHS) to issue a variety of regulations around Medicare—some within a 180-day window and others by one year from the date of the executive order. The executive order opens by opposing the proposed Medicare for All legislation in the US Senate. The document addresses the traditional fee-for-service Medicare program and Medicare Advantage (MA).

Among the provisions outlined, the order calls for HHS to issue regulations that would:

  • Encourage innovative and cost-saving MA plan designs and structures such as reducing regulatory barriers to obtaining Medicare Medical Savings Accounts (MSAs) and promoting innovations in supplemental benefits, such as telehealth
  • Adjust MA supplemental benefits so enrollees can more directly share in the program’s cost-savings, such as via cash or through rebates
  • Change fee-for-service Medicare payment rates to reflect charges paid by MA plans or commercial plans
  • Step up fraud and abuse activity to reduce waste in the system
  • Reduce administrative burdens on providers
  • Pay non-physician clinicians the same rates as physicians
  • Adjust payment rates to encourage clinicians to spend more time with patients (see the April 9, 2019 Health Care Current)

(Source: The White House, Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors, October 3, 2019)

ACOs saved $739M in 2018, according to CMS

Accountable care organizations (ACOs) generated $739.4 million in net savings in 2018, according to a September 30 blog from the US Centers for Medicare and Medicaid Services (CMS). So-called “downside risk” ACOs, which must pay the federal government if their patients’ costs are higher than savings targets, experienced bigger savings than ACOs that did not accept this risk. According to the agency, ACOs that took on downside risk had average savings of $96 per beneficiary, compared to an average $68 per-beneficiary savings for ACOs that did not take on downside risk. CMS’s data is based on the performance of 548 ACOs. CMS Administrator Seema Verma authored the blog, which was published in the research journal Health Affairs. Verma also noted that physician-led ACOs performed better than ACOs led by hospital systems—a finding consistent with what other analysts have found in the past. Physician-led ACOs saw an average savings of $180 per beneficiary, compared with $27 per-beneficiary at hospital-led ACOs.

The Medicare Shared Savings Program (MSSP), which oversees ACOs, adjusted its participation requirements earlier this year. In March, CMS finalized a one-time new agreement-period start date of July 1. ACOs entering new participation agreements after this date must operate under the restructured MSSP program, renamed "Pathways to Success.” Under Pathways to Success, new ACOs must assume downside-risk after three years instead of the previous six-year period.

(Source: Health Affairs, Interest In ‘Pathways To Success’ Grows: 2018 ACO Results Show Trends Supporting Program Redesign Continue, September 30, 2019)

CMS encourages wellness-program demonstrations in insurance exchanges

The administration is inviting states to implement wellness demonstrations within their Affordable Care Act (ACA) health insurance exchanges. The goal of this initiative is to reduce health care costs for states and reduce premiums for beneficiaries who exhibit healthy behaviors. CMS will grant 10 states permission to implement a wellness demonstration in their individual insurance markets. Once the program is operational, participating states must report data on participants and cost savings.

Consumer groups have raised concerns that programs like these could be a back-door way to discriminate (through charging higher premiums) against people who have pre-existing conditions and are in poor health. This concern could explain the long delay in implementing this requirement from the original legislation. While states are required to offer “reasonable alternatives” to individuals who have pre-existing conditions, CMS has not yet provided guidance on what it might entail.

While there is evidence that wellness programs alone do not always lead to healthier outcomes, such programs could be more effective if they leverage lessons learned from behavioral economics. Findings from the STEP UP study, funded by Deloitte in partnership with the Perelman School of Medicine at the University of Pennsylvania, suggest that wellness programs can affect outcomes if they use behavioral economics design elements.

(Source: CMS, Trump Administration Announces Opportunity for States to Participate in Wellness Program Demonstration Project, September 30, 2019)

CMS imposes readmission penalties on 2,583 hospitals

CMS recently penalized 2,583 hospitals for having higher-than-average rates of readmissions, measured as patients who were readmitted within 30 days of being discharged, according to Kaiser Health News. The Hospital Readmission Reduction Program (HRRP) reduces hospital payments if readmission rates are too high. During the most recent fiscal year, 83 percent of the 3,129 hospitals in this program received a penalty—an increase of 194 hospitals from the previous year. While hospital systems have expressed concern over whether these payment cuts help to improve patient safety, the penalties have provided an incentive for hospitals to reduce readmissions.

(Source: Kaiser Health News, New Round of Medicare Readmission Penalties Hits 2,583 Hospitals, October 1, 2019)

MedPAC discusses Part D benefit design, financing in proposed legislation

Possible benefit-design changes to the Medicare Part D program, and options for eliminating the coverage gap (including the potential for additional funding from drug companies), were among the topics discussed at a Medicare Payment Advisory Commission (MedPAC) meeting on October 3. The coverage gap, sometimes called the “donut hole,” occurs at the end of the initial Part D coverage phase when the beneficiary’s spending on covered drugs exceeds a certain amount ($3,820 in 2019) but before spending reaches the catastrophic gap.

During the meeting, MedPAC members said that enactment of bills in both the House and Senate would eliminate the coverage gap but would handle funding from drug companies in different ways:

  • The Senate Finance Committee passed the bipartisan Prescription Drug Pricing Reduction Act (PDPRA) in July (see the July 30, 2019 Health Care Current). Under this plan, drug companies would cover 20 percent of catastrophic-coverage costs.
  • In September, the Speaker of the House released proposed drug-pricing legislation, which would allow HHS to negotiate drug prices for all health plans, including Medicare and commercial health insurance, if enacted (see the September 24, 2019 Health Care Current). This bill requires drug companies to pay 30 percent of catastrophic costs and 10 percent of costs in earlier part of the benefit.

Breaking Boundaries

Tech companies see potential in home health

An aging population, increasing demands for personalized health care and convenience, and a shift to value-based care are driving investment and innovation in home health, including in services intended to support people staying healthy in their homes. In a final rule issued last spring, CMS said Medicare Advantage (MA) could pay for a variety of non-medical benefits—such as healthy meals or home air filters—that could help older people age in their homes. Traditional health care companies as well as retailers and technology firms are also seeing the potential in home health products and services.

South Carolina-based Cavulus is a technology firm that provides services to MA plans. The firm wants to help its clients provide better customer service to seniors. One element of this service is helping MA members access in-home monitoring technologies via their devices.

Best Buy Co. Inc., the consumer electronics retailer, entered the broader home health market in 2018 when it acquired GreatCall, Inc. The San Diego-based company sells health and safety solutions for seniors, including easy-to-use mobile phones, wearables, and home sensors. It also operates safety and wellness call lines. Best Buy’s plan is to go beyond simply selling devices to adding the analytics and services needed to help seniors age in place. The company, for example, wants to help older people install remote monitoring and other home care services.

Start-up firm CareSave Technologies, Inc. operates the platform, which helps consumers search for caregivers to help them or a family member at home. The company says its platform includes 80,000 care providers. The services include in-home care, which is paid directly by consumers.

Analysts estimate that the global smart-home health care market could be worth $30 billion by 2023, up from just $4.5 billion in 2017. Fall prevention and detection technology made up the largest share (39 percent) of the market in 2017. Other major categories include safety and security monitoring, health-status monitoring, memory aids, and nutrition and diet monitoring. Based on what we’ve seen so far, the most successful companies will likely be the ones that help care providers and patients save time while making it easier for both to connect.

(Source: Bailey Bryant, At-home care fueling disruptive Medicare Advantage Startups, Home Health Care News, September 23, 2019, Larry Dignan, How Best Buy plans to expand into home healthcare services, remote monitoring to help seniors age in place, ZDNet, September 25, 2019)

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