Increasing Emphasis on Population Health Impacts Hospital Finances?

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Increasing Emphasis on Population Health Impacts Hospital Finances?

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  • Written by Saeed Aminzadeh

In a traditional sense, population health adversely impacts hospital finances because of population heath’s focus on reducing avoidable utilization, and hospitals’ traditional reliance on revenue from any hospitalizations and emergency room visits. That said, value-based care (such as ACOs and other “at-risk” models) changes the equation significantly by shifting hospital reimbursement so that it is more aligned with the population health model.

If we define population health based on its original definition of keeping populations happy, healthy and in control of their health (and reducing unnecessary and avoidable test, procedures, and utilization), then no one can argue that population health is aligned with the “public good.” This definition is far broader than the current usage of the term, which is essentially focused solely on caring for the sick in order to reduce avoidable hospitalizations and emergency room visits. The original definition is far deeper with its roots in improving patient access, satisfaction, mental and physical decline, quality, medication adherence and health literacy. In other words, the intent of population health is to improve all of the components described above, and thereby reduce avoidable utilization. All said, in a vacuum, it would seem sensible and desirable that the concepts of “public good,” greater cost efficiency and profitability be aligned. That is the intent of population health and also the intent of the shift to value-based care…

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