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Expert population health tips for value-based reimbursement

McKesson Corp. chief medical officer details population health best practices for value-based reimbursement, including care coordination and keeping patients out of hospitals.

In this "Ask the Expert," Jonathan Niloff, M.D., vice president and chief medical officer for McKesson Corporation's Connected Care and Analytics unit, outlines key population health strategies for value-based reimbursement.

How important is population health to navigating the changeover to value-based reimbursement and how long is this changeover going to take?

Jonathan Niloff: I think we are approaching a tipping point. With the implementation of MACRA [Medicare Access and CHIP (Children's Health Insurance Program) Reauthorization Act] and MIPS [Merit-Based Incentive Payment System] in 2019, the legislation in its implementation is going to progressively accelerate the drive of physicians into alternative payment models or value-based reimbursement-type models. So, I think, by the 2020 time frame, we'll be approaching a tipping point for value-based-type care.

For an organization to be successful in value-based care, it's going to require successful implementation of a population health approach.

For an organization to be successful in value-based care, it's going to require successful implementation of a population health approach. Because optimizing clinical care, optimizing coordination of care across the continuum -- keeping patients out of the hospital, out of emergency rooms -- is going to be absolutely necessary to be successful in that type of model.

The second thing is understanding your cost and utilization patterns. Knowing what your per member per month costs are [and] having the technology in place ... so you can negotiate value-based contracts in an informed way with the payers, and so you can monitor your performance and understand where your opportunities for improvement from a cost and utilization point of view are absolutely going to be necessary for success. Being able to understand practice pattern variation and being able to educate your clinicians of where their opportunities are to improve both quality and resource utilization are going to be absolutely required for success.

The third thing is that, at the end of the day, traditional operating costs are still going to matter. So you are still going to need to pay attention to good old-fashioned cost accounting and understanding your direct costs for delivering care.

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