Three Strategies to Manage High-Cost Populations

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To drive down costs, focusing exclusively on managing chronic illness misses the boat.
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Medicare payment and delivery reform will demand that health systems better identify and manage high-cost Medicare populations.

On average, high cost Medicare beneficiaries share some characteristics: they tend to be low income and have complex social needs. Inadequate social support often plays out through a high demand for health care services. For example, an elderly woman who lives alone with severe dementia may visit the hospital repeatedly because of her inability to detect spoiled food in her refrigerator.

Until now, that woman’s health system had no incentive to ensure she was receiving healthy meals. But for the first time, payment reform is starting to reward providers who can substitute effective social support and services for medical care. Their challenge: identifying the most efficient and effective way to serve the highest cost populations, such as elderly adults and people living with mental illness.

Avalere best practices analysis identifies three opportunities to managed high-cost populations.

Health systems should focus on elderly patients with multiple chronic conditions who have difficulty handling basic daily tasks of living such as eating and bathing. Our research has found that it is often this inability to perform daily tasks, rather than the underlying chronic condition, that drive costs.

Health systems must address basic long-term care needs to reduce hospital use. For example, simple at home falls-prevention programs in the bathroom have demonstrated reduced hospitalizations.

Health systems will not be able to ignore the population with severe mental illness and co-occurring substance abuse. Health systems must develop systems and interventions to serve this population’s social and addiction-related needs.

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