Whether your business is self-insured or purchases a health plan, it’s time to bend the cost curve in your favor. Using a combination of robust data analytic tools and care management, population health management offers benefit managers a proactive approach to improve the health and well-being for members whose chronic conditions can account for 75% or more of your healthcare expenses.

Implementing a PHM program can be broken down into six pillars. Each pillar can be customized to produce the greatest impact on a given population.

1)      Accurately Identify the Population

At a minimum of three years, medical and pharmacy claims data is needed to identify the population. Additional data can include health risk assessments, biometric screenings, discrete lab values, vision testing and dental records. Ideally, there would be an initial data file followed by ongoing monthly electronic file updates into the data warehouse to automate the process. Once data sets are collected, analysis should include use of a predictive modeling tool, along with additional analytics, to identify the members of the population at highest risk and in greatest need for interventions. 

2)      Stratify the Population Based on Risk and Cost

Predictive modeling allows prospective identification of high-cost and high-risk members to forecast future costs and target individuals who may benefit from coordinated case management, disease management and expanded primary care interventions. Predictive modeling also predicts the cost of care based on clinically relevant classifications, identifies care opportunities and measures provider performance.

3)      Implement Care Management Strategies

The health management team uses knowledge gained from the data and predictive modeling to implement care management strategies. Data aggregation and analytics enables groups to customize programs using a level of detail that claims alone could not provide.

Depending on what the data shows, programs that could be deployed are care transitions, emergency utilization reduction, disease management, care gap reporting and more. While these programs are not traditional, employer groups have seen positive results in health outcomes based on analysis of their data. Each population may find a different sub set of members to target with unique, non-standard, high impact interventions.

Employer groups should consider:

  • Are their vendors providing results?
  • What new/innovative approaches are their vendors bringing to the table?
  • How much have their healthcare expenses increased annually?
  • What is the population’s health status?

4)      Engage Members

Without a member’s engagement, no amount of intervention will improve their quality of life, reduce their risk factors or slow the progression of their chronic diseases.  There is no single solution to engage members. Experience has shown that a catalyst will help yield the greatest impact. Common employer incentives including cash and benefit design based incentives are excellent tools to drive member participation and engagement.

However, incentives tend to have a short-term effect. Long-term engagement requires a cultural change supported by management strategies to communicate positively from executive leadership. Many companies are moving past the use of incentives to instead focus on an outcomes-based approach with the goal for members to take ownership of their health status and adopt healthier lifestyles. This shift from episodic “sick” care to wellness can bend the cost curve and drive positive health outcomes one member at a time.

Employer groups need to consider:

  • Which methods drive the right outcomes for employers and members?
  • What role can employers play in promoting use of these tools?
  • What role does the health management vendor play?
  • Cost vs. Value proposition.

5)      Provider Engagement

True PHM requires engaged medical providers. This can be challenging for employers, but there are proven ways to influence providers to improve the quality of care. Initial engagement can be facilitated by sharing gaps in evidence-based care.

Employer groups should consider:

  • What role does the PPO network play in motivating/incentivizing providers to provide high quality, evidence-based care?
  • Can you incentivize their provider network to offer more preventive services?
  • Does your health management company have a strategy to assure providers implement evidence-based best practices?
  • How can you or your health management firm promote greater coordination between primary care physicians, specialists, hospitals and home health care?


6)      Measure Outcomes

Central to an effective PHM program is the ability to compare baseline health measures with ongoing outcomes for a given population. Outcomes measurement is facilitated with a single data warehouse that provides baselines as well as the ongoing impact of the interventions implemented.

Employer groups should consider how to measure:

  • Member and provider satisfaction,
  • Member and provider engagement,
  • Changes in utilization,
  • Changes in risk scores, and
  • Quality improvement.


Putting PHM into action requires engaging a partner with the data collection, analytical capabilities and clinical expertise to help identify and engage the members who are the largest drivers of healthcare costs. Measuring and trending of the outcomes allows the health management team to adjust health interventions and optimize results.

Paul Mulhausen M.D. is the chief medical officer for Telligen.

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