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Chronic Care Strategy: A Cure for What Ails Us?

Rather than any early knockout in one of his epic matches, eulogies earlier this month for boxing legend Muhammad Ali memorialized his 3-decade, very public fight against Parkinson disease. The once-fleet-footed heavyweight champion’s chronic condition, in the words of former president Bill Clinton, “made his life bigger, not smaller” as he championed greater awareness and resources for the condition.

Chronic disease does not typically play out on such a high-profile stage. Nor has it been a top priority for most health system c-suites. Yet, make no mistake, the fact that fully half of US adults have at least 1 chronic disease means health system executives today have a ringside seat to a mounting problem. It’s time to make a wager with a comprehensive strategic approach; it will be a winning one. The business case has never been stronger.

The statistics tell why. More than two-thirds of Medicare beneficiaries have multiple chronic diseases; almost a quarter contend with 4 or 5. A staggering 93% of total Medicare spending goes toward beneficiaries with multiple chronic conditions.

Incentives for heightened emphasis on chronic care strategy are multifaceted, regardless of a health system’s dominant payment structure, size or demographics. Chronic disease drives service utilization and costs. Multiple conditions multiply the effect: among Medicare beneficiaries with 6 or more, over one-fourth had at least 3 ED visits annually, almost two-thirds had been hospitalized and nearly one-half required a post-acute stay.

These are eye-opening use patterns for anyone assuming clinical and financial risk for the health of a population. But even if you are not pursuing novel payment structures, an effective chronic care strategy will be essential to your organization’s bottom line. The quality and resource utilization component within CMS’s looming MACRA law alone puts revenue at risk for organizations ill-equipped to adequately manage care for this complex cohort. And MedPAC’s recent confirmation of the feasibility of a common payment unit for post-acute care services based on patient and stay characteristics rather than site of care will likely up the ante for the post-acute aspect of your chronic care strategy.

Adequate attention to patients with chronic conditions has an upside, even in a traditional fee-for-service model. It can enhance the organization’s mission, create new access channels, and foster patient engagement and loyalty. It has the potential to increase ambulatory revenue while yielding the cost savings needed to bolster a system’s value proposition for inclusion in tiered or narrow networks.

You may say you’ve got this covered with myriad chronic disease management approaches. Perhaps your organization is working to lower readmissions among congestive heart failure patients. Perhaps you’re pursuing patient-centered medical home accreditation or have launched initiatives to address growing behavioral health challenges. Likely you’re content with responsibility for chronic care initiatives residing within specific operational units, not in the c-suite.

But as the impact of chronic care becomes increasingly acute, any disease-by-disease approach is likely to fall short. For individuals with multiple conditions, especially, such an approach can be duplicative or so narrow it misses the mark: efforts to ensure Mrs Smith’s diabetes is well controlled are not likely to succeed if her chronic obstructive pulmonary disease (COPD), depression and social isolation are ignored.

It’s time to move beyond point solutions in this arena. A more systematic, data-driven approach ensures leadership can direct chronic care efforts where they will have the biggest impact. It helps address patients’ issues that are already known to clinicians and uncover those yet to surface.

Step 1 to effective strategy is understanding the size of the chronic care market and its growth. Although chronic disease tends to track with poverty and lower levels of education, analytic tools can pinpoint specific market segments with high concentrations of chronic illness. Sg2’s inpatient market and organization forecasts now include segmentation flags to help health systems understand this population.

Strategy must also:

  • Define the target population. Consider high utilizers, Medicare Advantage (MA) beneficiaries, accountable care organization members or patients covered under risk contracts first.
  • Determine the specific challenges the chronic care strategy will address. Strategic goals might be reducing readmissions, improving quality measures or lowering the total cost of care.
  • Risk stratify using a combination of analytical tools and clinical input. Analytics can help to answer the question physicians often ask—how do I care for patients I don’t see? But analytics have their limits. The retrospective claims data that fuel these tools can be months old. As one program administrator put it, “Physicians can identify a patient who’s going south more quickly than claims or utilization data.”

It’s also important to understand the compounding factors that transform a discrete diagnosis into “chronicity,” with its pervasive impact on independence, quality of life, frailty and long-term health management. The expanding categorization of chronic disease—to include not only familiar culprits like diabetes, heart failure and COPD but also degenerative, life-altering conditions such as Alzheimer disease or Ali’s Parkinson disease, even increasingly cancer—recognizes this concept of chronicity.

Progressive organizations we’ve spoken with accomplish this in different ways. One health system is targeting its 1,000 costliest MA patients in a specific geography and supporting them with extended physician appointments (60 minutes instead of the standard 15), along with help from social workers, advanced practice nurses and pharmacists. An integrated delivery network with a health plan has built out a remote monitoring program for its members with 5 or more chronic conditions (regardless of what those conditions are). Other providers are using various combinations of clinical risk assessment and utilization patterns to identify populations in need of additional resources. These systems have reduced readmission rates, lowered LOS, cut per-member-per-month costs and achieved millions in savings.

Expanding and elevating chronic disease management to true chronic care strategy will be the cure for what ails us. A chief accountable care officer for a health system summed it up recently by questioning the logic of having 3 separate programs for someone with heart failure, COPD and diabetes. “The things that are common across all chronic disease are more important to the outcome than disease-specific interventions.”

It’s time to step into the ring. In fact, it may already be the third round. Take a hard look at your institutional assets and capabilities—org structure, workforce, access channels, population health competencies. Capturing savings and revenue to sustain the strategy requires a broad view of both value-based and fee-for-service financial benefits. As always, Sg2 is here to help.

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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