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By JIM TOOLE, Consulting Actuary for MBA Actuaries Inc. and member of the Society of Actuaries

Population health management (PHM) is a proactive, cost-effective approach to identifying and implementing strategies for lowering utilization and costs of healthcare services while increasing the overall productivity of employer groups. Specialists are hired to create a tiered package of coordinated incentives and interventions designed to modify target behaviors, with the end goal of actually changing healthcare demand for a group. Effective strategies typically utilize a sophisticated mix of low-tech and high-tech communications and healthcare services to target issues at the group level, identifying individuals with chronic conditions amenable to PHM and helping them modify behaviors to prevent the onset of disease.

PHM ROOTS

While population health management is a relatively new term, its roots run deep in the field of public health. Public health is the science of protecting and improving the health of populations through education, promotion of healthy lifestyles, and research into disease and injury prevention. The parallels with population health management are clear. In contrast, clinical professionals focus primarily on treating individuals after they become sick or injured.

PHM as a discipline eventually emerged as a distinctly American approach to organizing a bewildering array of programs that have sprung up aimed at managing healthcare demand and improving the overall health status of employee groups. For a large self-funded group, these might include an alphabet soup of services including prevention, lifestyle, wellness, disease management, employee assistance programs (EAP) and health risk assessments (HRA).

In important ways, PHM is not dissimilar from enterprise risk management (ERM), another emerging field requiring the strong qualitative and quantitative skills sitting squarely in the actuarial domain. PHM programs are often established independently and managed in silos, but like ERM they work best when they are coordinated in an overall strategic approach toward achieving the goals of increasing overall population health and decreasing overall cost of healthcare services.

Similarly, top-down engagement is required in order to affect the degree of cultural change needed to address endemic health challenges, many of which stem from environmental and cultural sources far beyond the control of the employer.

PROGRAM ENGAGEMENT

There are no one-size-fits-all solutions; priorities for intervention are established based on the needs of each individual population. Like in public health, in PHM, epidemiological tools are used to identify risk factors that are present and amenable to PHM strategies. But the critical link is engaging employees to utilize the programs and services. Building employee confidence in the program and trust that there are shared gains is vital to long-term success.

From a high-level perspective, three types of activities need to be promoted to all employees to maximize opportunity for buy-in and engagement. The first is regular, open dialogue about the rationale behind the effort and a comprehensive description of the PHM activities available to the group. This is typically done at new program rollouts or when major program changes to the program have been implemented, such as the addition of a new program or service.

The second types of activities critical to effective implementation of PHM are educational opportunities on healthcare consumerism and self-care, including appropriate uses of the 24-hour nurse and EAPs. Educational opportunities work best when communicated across multiple channels, such as employee newsletters, workplace postings, health plan emails and mailings, and employee cafeteria promotions.

The last type of critical PHM activity is the full participation and completion of initial and periodic health risk assessments that query health behavior, risks, medical history and the perceived health status of the employee group. This provides initial baseline and ongoing information, allowing the firm to target interventions and assess progress going forward.

MEASURING THE EFFECTIVENESS OF PHM

PHM is an investment in human capital, consistent with the values and mission of many companies. Yet the yardstick of choice for employers considering investing in PHM is return on investment (ROI), not how the program fits with their culture, improves employee health or improves productivity.

When companies invest in education and training programs, do employers ask providers to supply an ROI analysis of their service offerings? Certainly not. Contrast this hurdle with clinical medicine, where ROI is rarely an issue, to say nothing of whether or not a provider is practicing evidence-based medicine.

This is not to say that progress toward goals should not be measured. There are many metrics to evaluate progress: year-over-year improvement in HRA scores; numbers of people with certain chronic conditions; participation in healthy programs (e.g., Weight Watchers, fitness center memberships); preventive screening utilization; and compliance with treatment protocols for chronic conditions.

Despite inherent challenges in developing unbiased, reproducible methodology that can be consistently applied to smaller as well as larger groups, various studies have shown a dollar invested in population health yields $3 to $6 ROI over a three to five year period. Calculated ROI figures typically include only the impact of medical savings, so they significantly underestimate the total program savings by excluding additional factors such absenteeism, presenteeism, disability and loss of productivity.

Healthy populations are a critical component of reducing the cost of healthcare and improving global competitiveness. But after more than two decades of worksite health promotion and wellness programming, employers continue to struggle to attract at-risk populations into entirely voluntary programs.

There remains a long-term need to create cultural change both in and out of the workplace to help support individual adherence to positive health behavior. Simply put, for PHM programs to be more effective, we need to find better ways to reach the unmotivated at-risk population.

Employers cannot shoulder this burden alone. Public health endeavors to improve the occupational environment must continue, communicating to workers the benefits of maintaining health and engaging employers' participation in health planning.

November 5, 2009

Copyright 2009© LRP Publications