Population Health Paradox around Cost Savings

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The principle of population health is to drive down cost in healthcare by preventing disease states before they occur. The assumption is of course that we are delivering more care closer to the consumers. However the marketplace is seeing a decrease in hospitals nationwide and a void of primary care physicians. How do we drive long short term savings results within the constructs of population health when the forces of supply and demand are set to drive cost higher for the foreseeable future?

Population Health
Economics
Cost Control
Sean Kayea, MBA
65 months ago

6 answers

2

This is fundamentally untrue. The cost control elements of population health involve avoiding inappropriate utilization. There are VERY few example of preventative medicine or chronic disease management decreasing overall costs. Further, the majority of large-dollar avoidable costs are driven more by social determinants than anything else.

The single largest opportunity for cost savings is usually avoiding readmission after acute discharge. The folks most likely to be readmitted are those with weak social network support (like no local family). The second largest opportunity for cost savings is (usually) steering patents from ED to primary care, particularly in Medicaid populations who tend to have a difficult time getting to primary care.

Effective disease management is not primarily to decrease costs: It is to improve outcomes. Disease management and preventative medicine usually raise costs.

Tim Breaux
65 months ago
Disease management and prevention decreases costs of ensuring a healthy nation in countries that practice Primary Health Care, PHC, resulting in longer life expectancy. Since this is a social program of smarter governments, it is inclusive of all sectors of society without discrimination of socioeconomic standing. The mantra of the World Health Organization, “A healthy nation is a productive nati. - Apollone 65 months ago
I am reminded of the general economic theory called: "THE PARADOX OF THRIFT? - Dr. David E. 63 months ago
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Agree totally with previous responses indicating that social circumstances can prevent early interventions and drive inappropriate utilization especially in economically disadvantaged and/or elderly populations. Another current and often unaddressed driver of inappropriate utilization is the opioid epidemic.

Agree with the original question about availability of doctors and hospitals as homes for DM programs as economic pressures will continue to drive hospital consolidation and capitated and/or risk arrangements will continue to force PCPs to shorten visits and see ever more patients per day.

Patients will continue to see ever higher deductibles and copays in their insurance coverages and these OOP costs can perversely encourage patients from seeking care until a condition is at a crisis.

Another challenge for the health care industry as a whole is data mining to produce valid actionable data and interoperable medical records that provide this data anywhere at any time.

I don't think the issue is all about availability of hospitals and/or primary care providers as much of the monitoring of high risk and/or chronic conditions can be done by nurse practitioners and can be accomplished in the home environment via remote monitoring and telemedicine. I expect that the technologies in this area will only improve and that the next generation will be more tech savvy and comfortable with these programs.

Jeffrey Baumeister, CHC
65 months ago
Well said. Reducing moral hazards, addressing the top 5 chronic diseases, and the last two years of life cost/benefit analysis will go al long way to addressing the current domestic healthcare dilemma. - Dr. David E. 65 months ago
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We as a country currently enjoy the highest number per capita of physicians, but as a country we need to address the growth in several conditions that ultimately require seeking medical care. Early monitoring will help somewhat, better treatments will help, but as the population continues to grow, so grows the need.

Primary care is shifting to use of physicians assistants and nurse practitioners, and reliance upon them to fill the gap. It is unlikely the current structure of physician training will increase it's capacity and output to meet the demand, hence the continued reliance upon PAs and NPs for the foreseeable future. The distribution of physicians tends to favor metro centers which is not going to change.

Sandy Waters
65 months ago
Physicians who pledged to do what is best for patients and their families are the antithesis of EBITDA for the Hospital, Health Insurance, Pharmaceutical, PBM, Med Mal and the EHR industries. - Dr. David E. 65 months ago
Davidi agree with your statement but am hopeful in the future the choices for doing the right thing will be significantly more cost effective and eliminate much of the associated overhead. Eg one CRISPR treatment to eliminate diabetes, or one to avoid Alzheimer onset, reduces chronic life long treatments. - Sandy 65 months ago
CRISPR etc, MAY decrease individual incident costs in the future but WILL increase total costs in the aggregate as more incidents are covered. - Dr. David E. 65 months ago
0

We need to look at both short term and long term cost savings. Decreasing readmissions and decreasing ED utilization are definitely good short term cost saving measures, but they are not a long term solution. In the long term, disease management and preventive medicine are going to be the tortises that win the race. Both of these strategies increase costs in the short term because we have not invested in the resources to do this work and the benefits are 5+ years down the road when the cancer, obesity, emphysema, complications of diabetes etc. are prevented. In our current payment and attribution models, it is risky to invest preventive medicine resources in a patient today, when the benefit is likely to be realized by someone else years down the road. An employer could definately benefit if they have a good employee retention strategy. A single payer model would definately benefit, which is why we see much higher investment in these types of strategies in countries with a single payer. But a provider in todays US market is gambling on retaining a patient for the long term.

If we do it right, and invest in preventive medicine and disease management, the two problems at the start of this post will solve themselves. We will need fewer hospitals and hospital beds and the "value" of primary care will increase and providers will gravitate to promary care.

Brian Patty
65 months ago
Unfortunately, MEDPAC is dominated by specialists. - Dr. David E. 65 months ago
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I recognize that I am a bit of a skunk at the picnic, but the cost performance of disease management and preventative medicine has been studied quite a bit. With the exception of preventative measures in the first trimester (which can mitigate the risk of a very expensive delivery in the very near future) almost none of the interventions pay themselves back. It is worth noting that effective management of chronic disease usually delays the eventual adverse outcome, versus avoiding it (with rare counterexamples; juvenile asthma comes to mind). Further, assuming we delay mortality with effective disease management, it means there are a greater number of sicker people living longer. There is no health system cost benefit, either in the short term or the long term. There may be societal benefit (e.g., productive people working longer) but health system costs only go up. They go up two ways: There are more sick people at any point in time, and each individual has a longer sick path before death.

Again, we do disease management and preventative medicine to improve outcomes, not to decrease costs. Remember that the most effective cost management strategy is not to treat anything. That is highly cost effective.

TSB

Tim Breaux
65 months ago
AGREED: Well said. Reducing moral hazards, addressing the top 5 chronic diseases, and the last two years of life cost/benefit analysis will go al long way to addressing the current domestic healthcare dilemma - Dr. David E. 65 months ago
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Once again, there is a fallacy of looking at this issue too narrowly and from a microeconomic lens. Let's look from a macroeconomic lens. Compare the US healthcare system with Sweden or any other single-payor macroeconomy where there is a stronger focus on and higher spend on disease management and preventive health. In Sweden, there is a strong focus on obesity preventive health, and the obesity rates are 10% vs. the 30% obesity rate in the US. Sweden also has a higher spend on disease management, and the cancer death rates are 115/100K vs. 133/100K in the US. There are also 3.3 primary care physicians per 1000 people vs. 2.3/1000 in the US. And people live an average of 4 years longer in Sweden. So by the argument above, the cost of healthcare should be more. Yet the per capita spend on healthcare in Sweden is almost 1/2 that of the US, $5500 vs. $10,000. You can see the same trend in any country where the spend on preventive medicine and disease management is far higher than the US, their healthcare expenditures are proportionally less.

Brian Patty
64 months ago
Hmmm. I don't think it is reasonable to use separate countries as cost frameworks for the economic value of disease management. We would need to compare US services with disease management/preventative care versus US services without. No one has demonstrated that disease management saves money (either at the individual level or at the population level). It improves outcomes. - Tim 64 months ago
Agree; thank you - Dr. David E. 63 months ago

Have some input?