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Written for Rita Numerof, PhD, President, Numerof & Associates

In a steady stream of news stories, health systems put quality care and positive patient outcomes on the back burner as they try to haul in as much money as they can.  

Denying coverage for mental health issues and burdening patients with surprise medical bills make it seem that providers are asking, “How many ways can we say no?” This is common in the current payment environment, and it must stop.   

With the current model, too many providers do only what they get paid to do, and no more. Providing the highest quality care—no matter the cost—isn’t anywhere near top of mind.

A system recently retained a management consulting firm, not to streamline processes or give caregivers the resources they need, but solely to achieve a predetermined cost—$120 million over a three-year period. They dubbed their project “accelerating excellence.”


If that organization were truly striving for excellence, it would be pursuing two main objectives: meaningful patient outcomes and cost-efficient, accessible care.

More and more patients are saddled with “balance bills”—charges that physicians who practice independently bill after the insurance company pays its share. For example, a patient who scheduled surgery with an in-network physician is hit with a surprise bill from an out-of-network anesthesiologist who assisted in the procedure.

This happens far too often. In the last year, four in ten insured patients ages 18-64 received an unexpected medical bill, usually from an out-of-network provider. In some instances, a patient must file a successful lawsuit, or foot the entire bill out of their own pocket.


And here is a wake-up call for providers around the country: Walmart has partnered with a third party to create an imaging network for performing MRI and CT scans for employees. A senior-level Walmart executive characterized the network this way: “It’s the right machines and the right readers, with negotiated rates.”


These unsettling examples reveal the pervasive lack of business discipline in healthcare delivery. It’s nothing new. Years ago, many systems didn’t implement the core disciplines needed for efficient operations, and today, too many patients shoulder high costs and receive lackluster care.


But there is a solution: A consumer-centered, market-based payment model with transparency in costs and quality, accountability with payments tied to outcomes, and real competition based on easily available, consumer-friendly data.


This model is at the heart of population health management. Population management practices facilitate the right care, in the right setting, at the lowest price. Systems can’t drag their feet any longer on this—they must take action now.   


When population management works well, acute care is reduced, total costs are lower and “healthcare” finally becomes more than just “sick care.”


Some systems struggle with aspects of population health management, especially the variations in cost and quality at the individual physician level.


But there are key actions that enable this approach to thrive:


  • Contract with entities outside a health system’s direct control

  • Develop clear processes to meet contractual obligations

  • Establish productive relationships with payers and employers

  • Identify, collect and analyze data to support value claims 


Implementing population healthcare can seem like a daunting task, but systems must know this: To be relevant and to thrive—actually, to survive—in today’s competitive marketplace, they need to make this change and provide the cost-efficient, high-quality care that patients expect and deserve.  

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