Population Health: The Future of Healthcare Delivery and a Republican Nightmare

This is America

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America is in Trouble

This should not be a secret to anyone. The Organization for Economic Co-operation and Development (OECD) is a collective of thirty-four industrialized countries that study economic phenomena for the common good of the group. America spends nearly three times as much money on healthcare as the average of all OECD member states. Its healthcare spending, as a percent of GDP, is more than twice that of the OECD average. Healthcare is not affordable. It’s obscenely expensive. Businesses are buckling under the intense financial burden of providing its employees’ with insurance. If America can’t reduce the cost of healthcare, an economic disaster will ravage the country.

We Have the Solution

There is good news. America has found a way to lower the cost of care. Certain parts of the country have been developing and utilizing this approach for decades. It’s called population health. It’s a simple concept. In this new model of care, health systems are responsible for the wellness of a particular population. There’s an important distinction  between a hospital and a health system. While some rural areas still have stand-alone community hospitals, the vast majority of hospitals are part of a larger network. Health systems vary in size, they include everything from a loose partnership of a few inpatient hospitals to an intricate network of research institutes, hospitals, freestanding outpatient facilities and other various care points that span the entire inpatient-outpatient continuum of care.

In a population health model, the role of the health system is to keep the population under its care healthy. The objective is to keep patients out of the hospital. Acute inpatient care is the most costly form of healthcare there is. Healthcare reform legislation, most importantly the Affordable Care Act, has put regulations in place, which provide hospitals with incentives that encourage responsible stewardship of resources and also provide penalties that discourage unnecessary costs. One mechanism that the government accomplishes this involves fixed payments for services. For example, Medicare will only pay a fixed amount for a particular procedure or resource. If the hospital wants to make money, its costs will need to be lower than the fixed amount it will receive as revenue. However, if the hospital discharges the patient prematurely, and they’re readmitted, then the hospital will be penalized.

How Do Hospitals Make Money?

The way that health systems achieve financial health involves managing the population so that patients access care at the correct point on the healthcare continuum. For example, many low-income, self-pay patients use emergency rooms as primary care clinics. This is bad for everyone. The patient will be charged an overwhelmingly large bill that they won’t be able to pay and then the hospital will have to eat the cost.

Outpatient care is much more cost-efficient and the reimbursement structures are much more attractive to health systems. Many insurance companies won’t even pay for certain procedures done at a hospital (such as a radiology exam) anymore. Population health systems must devise innovative ways to educate patients on the importance of preventative care, which includes finding a primary care physician, exercising, eating well and navigating the complex care continuum.

This helps patients stay well and out of the hospital, which reduces cost, and encourages patients to access the appropriate outpatient services for preventative care, which reduces cost and also enables the health system to make a profit. Savings that the health system achieves are savings that are then passed onto the patients in the form of lower charges. The incentives are aligned so that the patient and the health system work toward a common goal.

The Good Ole’ Days

This contrasts the traditional model of healthcare delivery. It is this model, along with the predatory food lobby, that is responsible for driving America’s healthcare expenditures into the stratosphere. The old, fee-for-service model provided a framework where the financial interests of the patient and the financial interests of the hospital were in conflict. The goal of the hospital was to see as many patients as possible and perform as many tests as possible, because each charge was more revenue. The hospital had a disincentive to keep the patient out of the hospital. It was not a healthcare system. It was a crisis management system. Despite the conflict of interest and clear evidence of its harm, many on the right view the fee-for-service days fondly. They fear the population health philosophy because of its potential impact on our freedoms.


Freedom has costs. Over a quarter of Americans don’t do any physical activity outside of work. Almost 30% are obese. 10% of adults have diabetes. Over 30% of adults have high blood pressure. The southern, Bible Belt states are the least healthy and, not coincidentally, are where the cry for freedom is heard the loudest. The country’s obsession with unbridled, self-destructive indulgence has always formed a symbiotic relationship with the titans of free enterprise. Marlboro. McDonald’s. Coke. Pepsi. KFC. The list goes on forever. They all manufacture poisonous, addictive products that keep the consumers coming back for more, despite their negative health effects. They also have bought the votes of the Republican Pary.

The freedom lovers decry any attempt to dial back the cartoonish excess of American consumers. 7/11’s “Big Gulp” is about five times larger than the normal soft drink cup size in Europe. Americans will not tolerate being told what to do. Initiatives to shrink soft drink cup sizes have been referred to as “Nanny State” control by conservative media outlets. The executives at Fox News are highly skilled at stoking, then guiding, their viewers’ sophomoric rage. This playbook was utilized by the tobacco companies to genocidal effect until the government achieved a landmark public health victory in the 1960s. Corporations don’t care who they kill, as long as the murder comes with a margin.

The move to population health is absolutely terrifying to Republicans because it attacks the dynamic of ravenous corporations, who prey on consenting freedom zealots, from every single angle. Their first concern is the bias towards stewardship instead of spending. Pharmaceutical companies, medical supply companies, capital equipment vendors and many others will be under intense pressure to show value in the face of hospitals’ need to curb expenditures. Health systems are finding new, innovative revenue streams, such as interventional cardiology and interventional radiology, that are minimally invasive and don’t rely on expensive surgical equipment. Gone are the days when hospitals could buy all the fancy new toys, without reservation.

The second aspect of conservative concern involves the standardization of care. Many Republican dinosaurs have spoken of how healthcare reform has unnecessarily burdened doctors. It is true that doctors are held to a higher standard of documentation now. Electronic medical records have changed the way that healthcare is delivered, but that predated population health implementation. One of the ways that some population health systems have lowered the cost of care is by creating evidence-based metrics that physicians have to meet in order to be a provider for those systems. Evidence-based care reduces variation in outcomes and optimizes the cost of delivery. Critics claim that this limits the “artistry” of medicine, i.e. some things will always require intuition. This criticism has little to do with any actual concern. It’s more of an ideological frustration with the philosophy of healthcare reform and the necessary regulation. Evidence-based care does not replace physician judgment ever.

Finally, population health is the knife in freedom’s heart.  America is experiencing a health crisis (including children) because America is unhealthy. Americans are fat and lazy and don’t like to be told to exercise. All true. However, the American diet is the biggest culprit. Americans eat like shit and are addicted to the poisonous products that are marketed to them by predatory corporations, which are protected by Republicans.

Population health is still in its infancy. It has not generated the level of conservative outrage that it will when the model matures. There will be weeping and gnashing of teeth when it does. Population health involves health systems convincing Americans to get off of their fat asses, exercise and eat a healthy diet. Health systems will be in the business of advising patients to not eat the poison that’s pushed on them by the food lobby. The food lobby, and by extension the Republican party, will unleash a maelstrom of fake outrage like the world has never seen before.

Imagine a system where the healthcare provider and the patient want the same thing. The provider wants to care for the patient appropriately and aggressively, but does not want to saddle the patient with debilitating financial burdens. It’s a nice picture, but it’s not that simple. The hospital must ensure that the patient has an appropriate discharge plan so that they don’t end up back in the hospital. That plan will involve outpatient follow-up visits, diet goals, exercise plans, social goals, etc.

The freedom-loving Republicans won’t view it in such rosy terms. The diet goals represent a threat to free enterprise. They’re an existential threat to their donor base. They won’t say that to the press. They’ll say that it’s a paternalistic edict that melts Americans’ sacred liberties away like a kid pissing in the snow. They’ll say that it’s the “Nanny State.” They’ll say: “Americans are smart enough to decide what they should be able to eat.” Republicans have a flair for showmanship, but they need to mix up their playbook. Who gives a shit if it saves lives and improves care? Lives saved doesn’t equal profit gained. That’s not what freedom is about.

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