PHM Drives Health System Decision-Making

By AmerisourceBergen |

The “why” behind population health management.

Population Health Management (PHM) has become a significant priority for healthcare executives, and it has been identified by hospital CEOs as a top strategic initiative.1 The goal of PHM is high-quality, low-cost care. But can health systems begin to align their care delivery models with the PHM approach? It starts with understanding the impact of PHM across the care continuum.

What is PHM?
Simply stated, PHM focuses on improving the health outcomes of a specific patient group by identifying, monitoring and chronically managing individual patients within that group. This not only includes delivering treatment to patients with complex and chronic diseases, but also implementing wellness programs to improve quality and contain costs across the entire patient population.

Why is it important?
Several market trends reinforce the need and urgency for health systems to build and acquire PHM-related capabilities, solutions and infrastructure, including:

  1. The promotion of Accountable Care Organizations (ACOs) as part of the Patient Protection and Affordable Care Act, and the emphasis on coordination of care for defined patient populations.
  2. The shift from fee-for-service to risk-based pay-for-performance reimbursement, as demonstrated by the U.S. Department of Health and Human Services, which recently indicated its target for risk-based payments for Medicare is 30 percent by 2016 and 50 percent by 2018.2
  3.  The creation of healthcare exchanges and the resultant need to better understand the risk and cost associated with this new population of patients.
  4. The integration of health plans with health systems is more closely aligning incentives around patient care.
  5. The surge of data as a result of electronic medical record (EMR) adoption, which has been driven by the $17 billion in financial incentives from the American Recovery and Reinvestment Act (ARRA) for Meaningful Use.3

What does this mean for the health system's future?
There are a number of important building blocks for PHM-centered care. For many health systems, an estimated 10 percent of patients drive nearly 70 percent costs.4 As such, health systems can find success in accomplishing the goals of PHM by focusing on programs and solutions that enable successful care transitions while controlling the cost of care. Specifically, the health system must strategically address how it approaches specialty pharmacy and transitional care. With a specialty pharmacy strategy, the health system can solve managing the care of patients with complex conditions via improved access to specialty drugs, as well as gathering data that demonstrates outcomes. And when it comes to transitional care, programs and solutions that include medication reconciliation, patient navigation and concierge services and post-acute follow-up will be key in reducing readmission rates and improving the health of the patient population.

Navigating PHM successfully means leveraging partnerships and solutions across the continuum to strike a balance between controlling costs and providing the highest quality care.

Learn more about driving outcomes with a specialty pharmacy or transitional care strategy.

1Punke, H. (2013, March 15). Top 10 Strategic Initiatives for Hospitals in 2013. Retrieved April 19, 2015, from
2U.S. Department of Health and Human Services. (2015, January 26). Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value [Press release]. Retrieved April 19, 2015, from
3National Council for Community Behavioral Healthcare Fact Sheet: Health Information Technology Provisions in the American Recovery & Reinvestment Act. (2009). Retrieved April 19, 2015 from
4Stanton, M. W., MA. (2006). The High Concentration of U.S. Health Care Expenditures. Research in Action. June 2006(19). Retrieved April 19, 2015, from