When some healthcare providers and leaders think of population health and accountable care organizations, they think of managed care and health management organizations. Besides the word "manage," however, these models have few things in common, according to Richard Afable, MD, president and CEO of the affiliated network of Orange, Calif.-based St. Joseph Health and Newport Beach, Calif.-based Hoag.
"In managed care, you assign people into an insurance product and try to control utilization to make a profit," Dr. Afable says. "In population health management, you enroll people in a health program and provide all the services they need to stay healthy. Profit is built into the model and success is determined by executing on the plan to deliver services that keep them well. It's a very different business model than managed care."
Dr. Afable says that like fee-for-service, traditional managed care remains mired in a backdrop of volume-based fee-for-service, incentivizing and rewarding hospitals, specialists and primary care physicians for the number of services rather than for outcomes or maintaining good health. "Fee-for-service is death by a thousand cuts," he says. "It's undermining the economics of our country. We've been addicted to fee-for-service revenue for more than five decades. We need to end the addiction; the model of the future has to be population health."
Population health and the value equation: Creating a network of care
St. Joseph Health and Hoag define value as improved clinical outcomes, enhanced patient experience and reduced cost. They believe that managing population health through a network of care is the best strategy to create this value. "To get the clinical outcomes they need, the experience they expect and the cost they can afford, patients need an integrated network of care," Dr. Afable says.
The goal of the St. Joseph-Hoag affiliation, which was finalized in February, is to create a network of care that will integrate services across a geography and continuum of care to improve the health of communities. "The two largest providers came together to create and add value," Dr. Afable explains. "In the old days, health systems would have come together to get better payer contracts and referrals and fill up hospitals. Neither was an element of this strategy."
By creating a network of care through shared and integrated resources, St. Joseph Health and Hoag plan to expand the coordinated care that individual patients receive locally to an entire population in a broader community. "What an individual person needs — a great doctor, maybe some ombudsmen, integrated information in real time, a patient portal — is also what populations want," Dr. Afable says. "By our coming together, [St. Joseph Health and Hoag] have created a network that will add value to and for large groups of people (i.e., populations) within our community."
More Articles on Population Health Management:
11 Strategies for Developing a Population Health Partnership
25 Population Health Challenges & Opportunities for Small Hospitals
AHA's Population Health Partnership Checklist