Retail inspired Innovation in Population Health Management


This blogpost was selected as one of the winning entries in the ‘The Future of Healthcare Innovation Track’ in the #HIMSS 15 Blog Carnival.

One of the fundamental tenets of healthcare reform and the affordable care act (ACA) has been the transformation of the economically unsustainable ‘fee-for-service’ model into a ‘pay-for-performance’ paradigm that indeed has far reaching implications for the healthcare delivery system in the US. Key to this paradigm shift has been the advent of the ‘Accountable Care Organization’ (ACO) responsible for ensuring population health management (PHM).

What is an ACO and how does it enable Population Health Management?

According to the Centers for Medicare and Medicaid Services (CMS), Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other healthcare providers, who collaborate voluntarily to deliver coordinated high quality care to their Medicare patients. It can also be defined as a set of health care providers—including primary care physicians, specialists, and hospitals—that work together collaboratively and accept collective accountability for the cost and quality of care delivered to a population of patients. This in essence is the concept of population health management (PHM) – collaborative and accountable care delivery and interventions to defined groups of individuals across the continuum of care with the express objective of improving their health and wellness at the lowest cost of care delivery.

As one can imagine, this is incredibly daunting but clearly a step in the right direction and truly represents a paradigm shift in healthcare. Given that this is relatively uncharted territory for healthcare, are their similar models from other industries that Healthcare can learn from?

Customer Segmentation in Retail and Patient Stratification in Population Health Management


Key to population health management success is to learn and analyze a cohort or population of patients while delivering personalized care to each and every one of them. This is not unlike the notion of segmentation and targeting in retail to offer the best customer experience to ‘markets of one’ as shown in the figure above.

Customer segmentation in retail is about analyzing data of your population or universe of customers, segmenting them to identify your core target segments that help meet your business objectives (sales and margins). Once this is accomplished, retailers like Amazon and Apple gather insights re: their wants, needs and aspirations via their historical buying behavior, their social media profiles, hobbies etc. to predict what they are likely to buy and make them compelling offers that are not only attractive for consumers but also profitable for their bottom lines.

For instance, Amazon is well aware of my penchant for books, music, electronic gizmos, business bestsellers, photography and travel as well as my quest for mysticism and cosmic consciousness, as well as when I am most likely to buy them. Amazon’s predictive analytics embedded e-commerce platform offers me a amazing array of offers comprising books, music CDs, photographic and electronic accoutrements that has me gleefully parting with my after-tax $ with little regret or dissonance whatsoever!

A similar model as shown above, is being applied for Patient Population Health Management based on segmentation of patient risk, predicated on their health history, demographics, socio-economic status, and their likelihood of chronic or acute diseases as shown above. The strategic underpinning is to develop an insights driven risk based approach and then marshaling constrained clinical resources and assets to ensure the adverse events and debilitating diseases can be prevented.

Comparing and Contrasting Customer Segmentation in Retail against Patient Risk Stratification in Population Health Management

Let us quickly compare and contrast customer segmentation in retail from a demand-supply economics perspective.

The key business drivers mobilizing customer segmentation in retail are demand-side economics i.e. shaping demand to drive higher revenue and profit per customer. This is about leveraging customer insights to identify the 20% of customers that contribute 80% of profits, and then leveraging demand forecasting and predictive analytics to understand their preferences, forecast their demand and make irresistible offers to these ‘markets of one’ to drive sales and margin uplift.

Au contraire, population health management (PHM) is all about analyzing and profiling the risks of a cohort of patients, targeting the 20% of the patients that will account for 80% of the cost of care delivery. This drives a ‘supply-side focus of optimally allocating constrained clinical resources and then proactively managing this risk and the associated costs thru monitoring and interventions beyond discharge, to minimize the risk and penalties associated with 30 day re-admission rates. The rewards for doing this well are shared savings and incentives, as well as associated efficiency and productivity gains across the healthcare system.

A Visionary ‘360 Degree Patient Care Ecosystem’ Approach to Population Health Management

At recent thought leadership events across this country, I had the opportunity to listen to visionary healthcare providers in this country including the Cleveland Clinic, Ochsner Health, Piedmont-Wellstar Health Plans and Texas Health Resources and their novel approach to addressing and resolving the Population Health Management conundrum. Their approach is truly revolutionary by the standards we have seen over the last 30 years, and brings ‘Accountable Care’ to life in unprecedented ways indeed!

“Did you ever imagine that your Physician and healthcare Provider would be accountable for your wellness beyond the four walls of the hospital following discharge? Can you imagine the economically constrained amongst us, being driven to their medical appointments by social workers? Can you even dream of being handed an iPhone running Apple Health and bluetooth enabled devices for monitoring your blood pressure and sugar levels by your doctor or nurse, for your personal health management at your home, school or office? Believe it or not, this is happening as we speak!”

Not unlike retailers like Amazon and Apple that aspire to develop a 360 degree profile of the buyer, these visionary healthcare leaders are orchestrating what I would refer to as a ‘360 degree patient ecosystem’ approach to Population Health Management. Not only is this creating value for patients thru wellness and disease management thru collaboration and shared accountability incorporating the ‘voice of the patient and their families’, but also culminating in measurable cost savings, incentives and efficiencies for these visionary healthcare providers.

The 360 degree Patient Care Ecosystem approach illustrated above, works as below:

* Harness patient data thru patient portals and electronic health records (EHRs) integrated with provider electronics medical records (EMRs) like EPIC and Cerner, and Health Information Exchanges (HIEs).

* Closely monitor patient condition in an in-patient setting while in the hospital to create a risk profile, predicated on ‘bases of segmentation’ including demographics, socio-economic status, education, family health history et al. Proactively identify the patients most-at –risk of re-admission before discharge.

* For these high risk patients, orchestrate a care coordination team comprising nurses, case managers, family, social workers and provide them with tools like iPhones, blue tooth enabled weighing scales, blood pressure and glucose monitoring devices to ensure that vital signs can be monitored and recorded beyond discharge by family, case managers and social workers. Provide free medication to patients that are financially constrained with instructions to family members to ensure medication adherence.

* Post-discharge, monitor medication compliance, vital signs thru tele-health interventions as well as data capture from iPhones and mHealth devices. Enable social workers to drive these patients to their weekly medical appointments if they do not have a vehicle.
Provide access to tele-health/tele-medicine services at work or in school to ensure minimal economic impact from minor ailments that can be addressed via these virtual interventions.

The results have been significant and measurable. Many of these visionary providers have seen 8-12 % reductions in 30 day re-admission rateswith 4-5X in ROI on every incremental dollar invested thru shared savings and incentives!

The Future Now – ‘Next Practice Innovation in Population Health Management’

So how will this 360 Degree Patient Care Ecosystem innovate and evolve to the next level?

Here are three areas of innovation that will drive ‘next practice measurable value’, in my humble opinion:

*  Patient empowerment for Personal Health Management thru Apple Health apps on iPhones and the new Apple Watch, integrated with EHRs and Patient portals as I have articulated in my previous post, Will Apple Health and the Apple Watch truly empower patients for Personal Health Management’?

Actionable Analytics for Physician and Provider empowerment: an evolution from excel-based and clunky legacy BI and analytics stacks to self-service data discovery and visualization tools like Tableau, with predictive analytics capabilities, for empowerment of physicians, nurses, clinicians and case managers for life-impacting decisions at the speed of care delivery, as described with the Piedmont Healthcare case study in my previous post, How will CIOs maximize ROI on their healthcare IT investments in 2015’?

*  Intelligent Workflows and Clinical Decision Support tools, complementing EMRs, HIEs and departmental systems, to enable the scale and speed of life-impacting decision making needed to monitor, analyze and care for the newly insured millions of patients who have entered the healthcare system as the beneficiaries of the affordable care act.

As always, I welcome your comments and feedback here and on Twitter at @HITstrategy.

Disclaimer: The perspective and views expressed in this Blog post are my own and do not represent those of my current or previous employers.

4 responses to “Retail inspired Innovation in Population Health Management”

  1. Janice R says:

    The example that you quoted above regarding retailer and consumer behavior is really very helpful to understand why ACOs are important. I also read another article recently, it was an interview on ACOs. Here’s the link

  2. […] my previous blog post, “Retail Inspired Innovation in Population Health Management” I have outlined a framework for leveraging best practices in segmentation and targeting and […]

  3. Joe Miles, Global Vice President Life Science Industry, SAP says:

    Nice piece. Well written and interesting point of view.

  4. Subhojit Roye, Certified Strategic Alliance Professional (CSAP) says:

    Andy Dé, Thanks, this was nice.
    Simple and Informative.

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