August 14, 2019

Deploying Value Based Care Contracts Under the Umbrella of Population Health Management: A Must for Success

Rose Maljanian, Chairman & CEO HealthCAWS

The evolution of our nation’s healthcare system and ecosystem from fee for service to value based care has only just begun, and while the goal is to rapidly accelerate the membership under value based care payments, it will be a long journey to refine the model.  Legislation, market driven mergers and disruptive innovation from industry veterans inside and outside of healthcare focused on the consumer are contributing to what at times feels like a roller coaster ride.  At the center of all of this is the growing population of seniors who largely receive their health benefits from the government, either directly or indirectly, through managed Medicare, Medicaid or Dual-eligible programs.  Seniors as customers want and demand choice, convenience and value as consumers do in other markets and industries.  The focus on these three elements is fundamental to any business strategy. However, necessary but distracting details, including type of legal entity, payment rates, payment flow, shared savings methodology and disbursements can completely envelop the airtime in leadership meetings. Alternatively,  framing value-based care under the umbrella of population health management supports a focus on seniors’ needs and wants and the strategies that result in affordably achieving optimal health for these populations.

Understanding payment models as financial lever of alignment

Value-based care payment models have been aggressively advanced by CMS and commercial payers over the last several years.  CMS’s stated purpose is to transform the health care system through innovation by paying providers for quality versus quantity of services delivered. Whether the program is a CMS program such as Advanced Payment Models (APMs), Merit-based-Incentive Payment System (MIPS) or a value-based contract as part of a commercial payer network, the payment method is simply put, the financial lever to align the care provided with outcomes-quality, experience and cost of care savings.

Virtually all value-based care models promoted or reporting positive results deployed the key elements of the population health management model to achieve success. Under current CMS value-based payment models 1 and those proposed for 2020 and beyond2, quality improvement strategies and population health metrics such a readmission rates are prescribed with advancing flexibility to reduce burden and achieve desired value.

In terms of results, Humana reported significant improvements in numerous quality metrics and 23.4% fewer inpatient hospitalizations and 15.6% fewer emergency room visits under value-based care arrangements in Medicare Advantage members.  In their report 3, they attribute the improvements to population health management infrastructure and strategies such as proactive outreach and whole person management.  Aetna similarly cited tools, infrastructure and approaches common to population health management as important to the success of their accountable care organizations. With Banner Health for example their Aetna Whole HealthSM program achieved 24 percent decrease in avoidable surgery admissions, a 4 percent increase in generic prescribing, and a 11.5 percent overall reduction in medical costs.4

In order for the end result to be a value-based contract that produces a positive net income versus one that adversely effects the organization financially, a solid population health management strategy must be deployed, tightly managed and iterated as populations and market conditions evolve.  Furthermore, without a positive consumer experience and health outcomes, retention of patients/members in a practice or plan is likely to suffer, further eroding the chance of success.

Staying true to the principles of population health management (PHM)

There are three enduring components of the population health management model:1) defining and understanding the population for which the organization holds accountability; 2) a portfolio of evidence based solutions that can be tailored to individual need at any given point in time and 3) measureable outcome results. The Population Health Alliance outlined a value focused framework for Population Health Management more than ten years ago that included these elements with consumers at the center.5

Defining the population up front (assigned vs attributed) allows organizations to understand their populations, stratify risk and preference for engaging so that when crafting and triaging individuals to programs and tools, the programs and tools are those that consumers want and need.

Programs and tools must be available to address the full continuum of care whether to maintain health, address an acute event, support chronic care management or support comfort at end of life. Furthermore, solutions must include a multifaceted approach depending on where an individual is on the care continuum, their life goals and their preferred means of engaging. Studies by the PEW Research Center have demonstrated consistent increasing uptake in technology for seniors 6,7 including 53% owning a smart phone and 59% having broadband access.7 Addressing barriers such as trust, cost and tech support will likely fuel further adoption among all income and educational levels. In recognition of this trend, many organizations are deploying blended high touch and high tech strategies in their senior health programs.

Finally, a focus on the endgame of outcomes across populations will ensure success with multiple value based contracts. The population health management model has always had a focus on outcomes that include clinical, utilization, satisfaction and experience of care and cost metrics.  When staff deploy consistently high quality evidence based care that achieves consumer goals, the likelihood of missing mutually agreed-to standard metrics in a value based arrangement as a result of inconsistent care, lack of consumer engagement or gaps from confusion when doing different things for different populations is bound to decrease.

Executing well on solutions that solve needs and preferences

The need to execute well in a world of high visibility of alternatives for care, experience ratings and mounting pressure on cost transparency cannot be overemphasized.  Executing well no longer means getting ID cards and EOBs out on time and finding an opening for the consumer in the same week to be seen by a PCP or specialist.  It will command listening to what consumers desire to achieve, such as return to playing tennis, being able enough for air travel, controlling their diabetes versus diabetes consuming their life with too many appointments and tests, reducing days not feeling well enough to enjoy getting out and living life or just living long enough to see a marriage or birth. Furthermore, living life involves conserving seniors’ financial resources as well through optimized care, lower total cost of medications and value-added supplemental benefits such as concierge services and care management, home modifications, light housekeeping, transportation and nutrition support.  Scan Health Plan recently announced expanded benefits for seniors to age in place at home.  This followed a market survey confirming the trend in which 88% of their addressable market in Southern California expressed a desire to stay in their homes.8

As leaders, promoting common understanding of what it means to deliver value and how to get there

As leaders we need to guide the discussion on value amongst our colleagues, all payers and the public at large.  Value based care is not about the contract itself. The contract is a financial lever under the umbrella of population health management. it is about delivering value (quality and affordability) to each healthcare consumer, the payer customer, and keeping those that bear risk whole and flourishing as they serve at the front line of healthcare transformation.




  1. CMS Value based care programs updated 5.17.2019.
  2. CMS QPP Resource Center updated 7.29.19.
  3. The Intersection of Heath + Care: Value Based Care Report 2018.
  4. Accountable care organizations: Transforming care delivery to support members, increase cost savings February 12 2018
  5. Population Health Alliance Population Health Management  model
  6. Anderson M and Perrin A. Tech use climbs among seniors. Pew Research Center May 17, 2017
  7. Anderson M. Mobile Technology and Home Broadband 2019 Pew Research Center June 13, 2019
  8. SCAN Health Plan Addresses Seniors’ Desire to Remain at Home With Expanded Benefits, Reduced Costs Nov 14, 2018,


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