Cost-Benefit Analysis: Is Population Health Management Software Worth the Investment?

Between rising costs, increasing chronic conditions, and the shift to value-based care models, healthcare today is under pressure like never before. Providers are continuously being asked to do more with less. The focus is expanding beyond treating individual illnesses to managing the health of the entire population. In this changing landscape, Population Health Management (PHM) software promises to be a strategic solution for delivering better patient outcomes for the entire population while minimizing costs.

However, for organizations considering the investment, the key question remains: is it actually worth it? This blog breaks down what PHM software does, what it costs, what you stand to gain, and whether it truly delivers a meaningful return on investment. 

How Population Health Management Software Works

A PHM software focuses on a data-driven, proactive approach to patient care for the entire population. The software extracts vast amounts of data from a variety of sources such as electronic health records (EHRs), lab systems, insurance records, and social determinants of health (SDoH). The software then creates a centralized view of the patient population, allowing healthcare providers to understand who is at risk, who is falling through the cracks, and where to intervene early. 

Healthcare teams are able to provide personalized treatment for each patient by leveraging actionable insights provided by the software. These insights help the providers in comparing similar case histories of the entire population, what has worked for each case, and modify the treatment plans for their own patients accordingly.

The proactive nature of PHM solutions drives providers’ preventive care efforts, tracks patients’ performance metrics, and helps organizations stay compliant with increasingly complex reporting requirements. In essence, PHM software is like the command center for managing population health effectively.

Key Costs to Consider When Implementing PHM Software

The addition of a PHM software to any organization’s operations demands substantial investment that goes beyond just signing a contract. Here are some expenses that the organizations should prepare themselves for:

• The initial setup involves licensing fees, depending on the size and scope of the organization. 
• Additional expenses are incurred in customizing the software according to the organization’s current workflows and integrating it with existing systems such as the organization’s EHR platform. 
• Another category of costs includes operational costs, which include any expenses incurred in providing technical support and training to the staff on how to use the solution efficiently. 
• One of the most overlooked costs is time. Adopting any software requires a rethinking of workflows, adjustment of team roles, and a period of adaptation, taking up several months for some organizations. 

Once everything is in place, the potential for long-term value for any software becomes much clearer. 

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Top Benefits of Investing in PHM Software

Despite the upfront efforts, PHM software promises great benefits that outweigh the initial investment:

1. Better Patient Care

PHM solutions help providers offer more personalized, preventive care. The software analyzes the entire population thoroughly to identify people at high risk for complications or hospitalizations, making it easier for care teams to intervene early. The software converts reactive care into proactive care, improving disease control and closing care gaps instead of waiting for patients to show up in crisis and then starting their treatments.  

2. Financial Wins

PHM solutions can significantly reduce unnecessary costs, benefiting every stakeholder involved. Organizations experience a more efficient allocation of resources and significant reductions in hospital readmissions and emergency room visits. In this era where reimbursements are directly related to outcomes instead of volume, these improvements can directly translate into meaningful financial benefits as they reduce unnecessary treatments and tests.

3. Smoother Operations

PHM solutions can also streamline most of the burdensome tasks that used to create chaos in an organization’s workflows. They provide insights in the form of built-in dashboards, automated alerts, and real-time reporting, saving healthcare staff’s time spent rummaging through multiple spreadsheets. The staff is able to easily track the solution’s performance based on key metrics, enabling certain modifications whenever required to improve the current operational processes of the organization.

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The ROI Breakdown of Implementing PHM Software

When it comes to return on investment (ROI), many organizations begin to see value in terms of reduced costs and increased care quality. However, the speed and scalability of that ROI depend on several factors. Large organizations with complex patient populations benefit the most from PHM solutions because of more opportunities to reduce high-cost care and improve outcomes at scale. The solutions also benefit organizations which are already participating in VBC contracts, such as Medicare Advantage and accountable care organizations (ACOs), as their financial incentives are directly tied to performance.

Irrespective of the organization’s size, any software needs to be used strategically and consistently to extract adequate ROI for the organization. That means leadership buy-in, dedicated care management staff, and a culture that embraces data-driven decision making. 

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Final Thoughts: Is It Worth It?

PHM software is a significant investment. However, if the organization is ready to take that step towards change, the rewards can be significant. The software would be a great fit for organizations that manage large or high-risk populations, operate under value-based payment models. For organizations that aren’t engaged in risk-based care or lack the infrastructure to support a robust analytics platform, a pilot program would be the right move for a successful implementation of the software.

Even limited use of a PHM software can generate valuable insights and help build a case for broader adoption over time. Innovaccer’s PHM solution can offer a powerful way for your organization to reshape care delivery, step by step. It efficiently reduces care gaps and documentation time by surfacing care opportunities at every patient touchpoint and generating care plans from patient conversations in real-time. The solution helps improve provider performance with real-time assessment against different metrics. With the right strategy, support, and commitment, it can help your organization shift from reactive treatment to proactive population management. Book a demo today to know more.

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