Aligning Accountable Care Models With The Goal Of Improving Population Health

Editor’s Note

This article is the latest in the Health Affairs Forefront series, Accountable Care for Population Health, featuring analysis and discussion of how to understand, design, support, and measure patient-centered, cost-efficient care under the umbrella of accountable care. Additional articles will be published throughout 2024. Readers are encouraged to review the Call for Submissions for this series. We are grateful to Arnold Ventures for their support of this work.

Policy makers and health care leaders are well aware that despite spending twice as much per capita on health care, the US leads amongst high-income countries in early mortality. Within the US, health disparities are widening and pervasive, with variations in life expectancy present across geographic scales (neighborhoods, counties, and states) and across racial and socioeconomic populations. The crisis of US life expectancy has drawn increasing attention in recent months, with the Washington Post publishing an extensive series and a commentary in the New York Times calling attention to the “scandal” that is US health care, but focusing on how chronic disease is contributing to premature mortality.

We argue here that a complete transition to global payment models, such as those employed by accountable care organizations, combined with a shift to population health-focused performance measures should be used to encourage health care organizations to play a leadership role in improving health and eliminating health inequities within the US population. We take this stance for three reasons. First, life expectancy is powerfully influenced by modifiable clinical and behavioral risk factors that are already the direct responsibility of primary care. Second, providers can improve these if they have the tools, incentives, and flexibility needed to do so, as we discuss below. Third, if sufficiently motivated to improve health, we suggest (with some evidence) that providers can and will reach out to collaborate across sectors to work upstream to improve the vital conditions essential to health and well-being in the communities they serve and advocate for the policy changes required to do so.

To Improve Life Expectancy, Focus On Modifiable Health Risks

The Global Burden of Disease project has for decades documented the causes of death across 204 countries and territories (including states and counties within the US) and has carried out the systematic reviews needed to identify the major risk factors associated with premature mortality and morbidity. This foundational research has created the opportunity to measure the health of individuals based upon their current clinical and behavioral risks. A model combining individual risks into a single risk score accurately predicts life expectancy and should be updated and tested for use within care delivery and as a direct measure of current population health that would be useful as a component of the CMS Universal Foundation of quality metrics. Why?

These risks are important. In a 2017 paper examining trends and variations in US life expectancy, modifiable behavioral and metabolic risks explained 74 percent of the county-level differences in life expectancy and the majority of socioeconomic and racial differences. By incorporating all major modifiable risks and focusing on all-cause mortality, the new risk score would be an advance on currently employed risk scores that focus on predicting cardiovascular events, which, while important, fail to include many other important modifiable risks or causes of premature death (such as cancer or substance use).

Modifiable risks are measurable. The risk score developed by the Institute for Health Metrics and Evaluation (IHME) combining these risks accurately predicts life expectancy for individuals ages 30 years and older and has been validated in both national data and the Framingham study population.

Exhibit 1 lists the risks included in the IHME risk score. These modifiable risks contribute to many of the leading causes of premature mortality. Information on some of these risks can be drawn from electronic health records; others can be measured using the health risk appraisals that are widely administered on an annual basis. The risk score can be calculated at multiple levels: for an individual patient, for the panel of patients cared for by a clinician or practice, and for a health system or payer.

Exhibit 1: Estimated years of life expectancy gained over the subsequent 10 years for the US population from eliminating modifiable risks

Source: Lim SS, Carnahan E, Nelson EC, Gillespie CW, Mokdad AH, Murray CJL, et al. Validation of a new predictive risk model: measuring the impact of the major modifiable risks of death for patients and populations. Population Health Metrics. 2015;13:27.

Furthermore, as the name implies, modifiable risks are modifiable. Several are clearly within the direct responsibility of clinicians (blood pressure, blood sugar, and cholesterol), but almost all primary care clinicians and health plans see these behavioral risks as important levers to improve overall health and reduce future health care costs. And, importantly, the risk score itself will change in real time to the extent that the biomedical risks are better controlled, or behavior changes (such as smoking cessation) are achieved. An updated risk score will incorporate differences across risks in the strength of evidence on the impact of change on mortality.

The potential use cases of adding measures of modifiable risk factors to payment models are many. At the patient level, the measure could help clinicians and patients jointly decide on which risks to prioritize. Some patients may feel better able to control their blood pressure through medication than to stop smoking. Shared decision making and motivational interviewing could help patients make and sustain these changes. The risk score could help identify those who will benefit the most from focused attention: Twenty-five percent of the premature mortality risk is concentrated among only 5–6 percent of the population ages 30–44. While the risk broadens in the population in association with aging, it remains highly concentrated (12–14 percent) even for those ages 70–79. These risks are more common in less advantaged populations. For larger health systems, the risk score could be used to compare and motivate performance on health risk reduction across practices and, when combined with a measure of the total cost of care, to evaluate the relative value of different improvement strategies. Finally, as we are suggesting, a performance measure based upon the risk score could be used to focus attention on both population health and equity in value-based payment programs, the latter by requiring organizations to demonstrate improvement for less advantaged populations, reducing the risk that organizations focus only on those in whom change is easiest to achieve.

To Improve Health And Care, Complete The Transition From Fee-For-Service To Global Payment

Alternative payment models are gaining traction, but fee-for-service remains the shaky foundation of US health care. We pay more for amputations than for preventing them. Almost all hospitals still rely largely upon fee-for-service payment. Physician practices are also highly dependent upon fee-for-service. In 2022, an average of 69 percent of practice revenue was derived from fee-for-service, and 89 percent of practices received at least some fee-for-service payments. Their margins (and in many cases their survival) therefore depend upon maintaining their “throughput,” the ugly but widely used term for patient care that explains overtesting, overtreatment, and the 10-minute office visit.

If we want to improve population health and lower costs, we must complete the transition to payment models that provide much stronger incentives to improve health, coordinate care, improve efficiency, and avoid unneeded care and preventable complications. Capitation, a prospective monthly per-patient payment to the practice or health care delivery organization for the total cost of care, is the most effective way to do this.

Capitation offers an important second benefit by giving providers the flexibility they need to innovate in care delivery using services or tools that would not be reimbursed under fee-for-service. The National Academy of Medicine and others have called for the adoption of team-based primary care models that require both flexibility and additional resources. Capitation—if payment rates are adequate—would provide both. Sanjay Basu and others found in 2017 that adoption of team-based care models is only affordable when more than 63 percent of a primary care provider’s practice is capitated.

Capitation by all payers to an integrated provider will provide a more powerful incentive to both improve care and lower costs. Brent James and Greg Poulsen argued in the Harvard Business Review in 2016 that capitation is the only way to motivate and achieve the dramatic savings of 35–50 percent of current health care spending that they believe is possible in US health care. Capitation should ideally be deployed at organizations that can bear the risk and therefore capture the rewards from improvement.

Two examples help to underscore the benefits of capitation and the challenge posed by models that must weave together capitation and fee-for service.

Kaiser Permanente clinicians are almost completely reimbursed through capitation. This has allowed the Kaiser Permanente system to redesign care from top to bottom. All of their patients receive primary care under a team-based model in which physicians, health coaches, nurses, and behavioral health specialists work together—and keep unnecessary work off the desks of their physicians. They have no incentive to focus on “throughput.” Instead, they have aligned professional and financial incentives to use their available resources to keep people healthy. The results are striking: Cancer screening and blood pressure control rates are continually among the best in the country; based on mortality data for 2018, Kaiser Permanente members are 33 percent less likely to experience premature death from heart disease than others living in their community.

There is also a second order effect seen at Kaiser Permanente relevant to our argument that health care organizations can and should lead efforts to improve health: The financial incentives to keep people healthy lead them to collaborate with others in the communities they serve to address the upstream social and economic factors that contribute to poor health, such as inadequate housing, food insecurity, and limited economic opportunity.

Pearl Health offers a telling contrast. They support about 1,200 primary care providers in 43 states under global risk models (for example, Accountable Care Organization Realizing Equity, Access, and Community Health [ACO REACH] Model), but only for their Medicare beneficiaries. The practices are able to make major improvements in care for these patients. However, because Medicare makes up a small proportion of the patients they serve, practices struggle to adopt team-based care models for their other patients even when they know it would result in better care and better health.

Important And Necessary, But Not Sufficient

Health care organizations are well-positioned to make a difference in the struggle to address premature mortality and the disproportionate care received across racial, ethnic, and socioeconomic groups within the United States. Hospitals and health systems are major employers in nearly every community. As anchor institutions, there is much that they can do on their own. And most have representation on their boards from the sectors that must act together to improve the health of the communities they serve. Accountable care payment models that include life-expectancy measures for their patients would strengthen their incentive to address all of the causes of premature mortality.

The benefits could be substantial. A 2016 simulation model found that investing in a portfolio of high-leverage health-improving strategies could have a profound impact. After 25 years, the burden of chronic illness and the share of the population living with economic disadvantage would both decline by 20 percent, health care costs would fall by 14 percent, and the productivity of the workforce—measured as the value of wages—would improve by 9 percent, a huge economic gain for employers and communities.

But the model also showed that a shift to capitation or similar global payment models was an essential component of the portfolio. To improve health and lower costs, we need to change how we pay for health care.

Authors’ Note

Andrew Bindman is employed by Kaiser Permanente and is on the board of directors of the National Quality Forum. Elliott Fisher is an employee of Dartmouth College where he leads a research program focused on improving population health and primary care, funded largely by two grants from the National Institutes of Aging. He is also on the board of the Rippel Foundation, which strives to create the vital conditions where all can thrive. He receives a small annual stipend for his service on the board. Michael Kopko is CEO and board member of, and a shareholder in, Pearl Health, Inc.