According to researchers, the quality and availability of clinical care is only one of a combination of factors that determine the overall health of a given population. The other major influences are mental, social, lifestyle and environmental factors. In other words, if we have unhealthy lifestyles, live in poverty and have mental health problems, our lives will generally be unhealthier than average, despite the best efforts of our medical providers. The unhealthy population also incurs disproportionately high medical expenses, which, in turn, contributes to the escalating cost of American health insurance.
In the pay-for-medical-procedure reimbursement systems, which have been prevalent in this country for decades, funding has not been available to pay for wellness, disease prevention, chronic illness management and the other factors that influence our health, such as housing and unemployment. Payment has been available for health care providers to work downstream with a growing population of sick people, with little money available to address the problems originating upstream. Consequently, health care costs in the United States are considerably higher per capita than any other country in the world.
The new value-based health payment systems being adopted by federal and state governments, as well as private insurance companies, take a more holistic approach to reimbursement, and build in funding for upstream disease prevention and chronic care management. Since these new models financially incentivize health care providers to do wellness visits, coordinate care and collaborate with other health and social service providers, overall costs have been going down, while quality and access have been improving.
An example of this value-based population health payment model is currently taking place in California. One homeless man in Los Angeles, for example, had 62 separate emergency room visits in one year, and cost the state hundreds of thousands of Medicaid dollars to pay for needed medical services. With nowhere to go for shelter, the man was repeatedly discharged to the street, only to return a few days later in need of additional care.
In 2015, California began a Housing for Healthy California Program that provided supportive housing for the sickest population of homeless people. In addition, small dogs were sometimes provided to these individuals for companionship. The results, in terms of cost savings and improvements in health and wellbeing, have been extraordinary. Even subtracting the additional housing and support costs, the state Medicaid provider, Medi-Cal, saved hundreds of thousands of dollars in the first year.
Other studies of chronically homeless people who moved into supportive housing show dramatic decreases in hospital and nursing home stays. Some states have documented avoidance of medical costs surpassing $17,500 a year for each supportive housing resident.
The homeless are only one of the populations that benefit from a holistic, upstream approach to population health management. Diabetes and mental health patients, seniors in need of long-term care, and even school children with asthma are becoming the focus of these new models, and the early results are very promising. We are beginning to forge a health care system of high value, that is worthy of world leadership. As Winston Churchill reportedly said, “Americans will always do the right thing, after they’ve exhausted all of the alternatives.”
Terry Hill is senior adviser for rural health leadership and policy at the Duluth-based National Rural Health Resource Center, and he teaches management and leadership for the MBA program at the College of St. Scholastica. He can be reached at firstname.lastname@example.org.
On Health Care: Population health, the ultimate measure of value