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Financing Population Health Improvement: Workshop Summary (2015)

Chapter: 6 Implications of New and Emerging Sources of Population Health Funding

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Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
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6

Implications of New and Emerging Sources of Population Health Funding

In the workshop’s concluding panel, two members of the workshop planning committee—James Hester, an independent consultant and the former acting director of the Population Health Models Group at the Innovation Center in the Centers for Medicare & Medicaid Services (CMS), and Jeffrey Levi, executive director of Trust for America’s Health—put the day’s presentations and discussions into perspective. Each panelist made a short summary presentation, and then moderator Mary Lou Goeke, a member of the workshop planning committee and executive director of the United Way of Santa Cruz County (California), opened the floor for discussion.

Hester commented that when the organizing committee was developing the workshop agenda, its members wanted to provide a sense of the innovative financing vehicles that are being developed to support population health initiatives. With that in mind, the committee decided to focus on three specific financing schemes, but the committee recognized, he said, that there are other promising approaches being developed and tested. Examples of these other approaches include the work being done to revise payment models for clinical services that will support population health and demonstration projects that CMS has approved for work related to Medicaid waivers. “There is a very dynamic environment for vehicles to support the work that we are talking about,” Hester said.

One important feature shared by all of the efforts discussed at the workshop, he remarked, is that they are tied to specific interventions in defined populations in specific communities. To move beyond talking

Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×

about individual vehicles and funding individual initiatives, Hester said, it will be important to create some entity that can integrate these different programs so that they reinforce each other. By doing so, it may be possible to reach what he called the “elusive Holy Grail” of a sustainable financial model for population health. “What we’re talking about is a balanced portfolio of interventions with partial capture of savings to create that virtuous cycle of money for reinvestment,” Hester explained. Such a portfolio would be balanced in terms of time frame—it would include interventions with short-, medium-, and long-term results—and it would be balanced in terms of risk profile. A portfolio approach could create an environment in which savings from interventions with a substantial body of supportive evidence are used to fund demonstration projects of additional interventions for which a body of evidence has yet to be accumulated. “I believe that these community-based structures are laboratories, and we should view them as laboratories for the development of evidence,” Hester said.

An integrator organization, he added, would serve to aggregate and align revenue streams and capital to meet the needs of the community. The integrator would also work to leverage both private and public funds to achieve greater impact over time and to establish a continuous quality improvement program that would monitor performance of the portfolio programs and make adjustments based on how the programs are performing in the community. In addition to program management skills, the organization serving as an integrator would need to possess fairly sophisticated broker and financial management capabilities so as to be able to conduct and sponsor feasibility studies, identify the potential partners that could do the execution, and identify an appropriate financing vehicle with a risk profile and time horizon that matched with the intervention. Hester said that there are prototypes for this type of organization, including the Rippel Foundation’s ReThink Health, which works with communities in places such as Pueblo, Colorado, to help them develop leadership and redesign their health and health care systems.1 Another is the Robert Wood Johnson Foundation’s Aligning Forces for Quality program, which involves 16 communities in creating models of reform for the reduction of racial and ethnic disparities and the improvement of health and health care.2 Hester concluded his comments by saying that it is important for the field to clearly define this integrator role in the near future. “If we don’t, we run the danger of the financing vehicles actually outrunning our capability to integrate them at the community level in an effective way.”

In his comments, Levi agreed that the social financing field is moving

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1See http://rippelfoundation.org/rethink-health (accessed July 22, 2014).

2See http://forces4quality.org (accessed July 11, 2014).

Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×

rapidly and that public health officials need to consider the points that Hester raised now if they want to be able to take advantage of these new financing mechanisms. “Those making social investments are probably neutral about whether they’re investing in housing, community development, or public health [interventions], and so [public health agencies] need to be ready to compete in this environment,” Levi said.

One of the challenges that governmental public health agencies face in taking advantage of these new financing mechanisms is that using the mechanisms will require developing the language to work with new partners. An opportunity for governmental public health lies in its potential role as chief health strategist for a community. In that role, Levi said, it is possible that public health agencies would not actually collect data because the health care delivery system generates far more data than public health agencies would ever be able to collect; instead, the agencies would take on the role of analyzing the data and creating the health impact assessments that can be used to drive a community’s efforts. Filling this role will require becoming comfortable with some level of accountability without necessarily having line responsibility, which Levi acknowledged will be a little scary. “I’m going to be held accountable by my mayor, my governor, and my county executive for the health of the community, but I’m depending on these other people to improve the health of the community, and I don’t have any direct authority over them,” he said. Indeed, playing the role of chief health strategist will require exercising soft power rather than direct power.

Another challenge going forward, Levi said, will be accounting for how much money is being invested in public health interventions (aside from the interventions funded by public health agencies). “As we convince more people, more investments, and more programs to give a public health purpose to what they are doing, accounting for those investments is going to be more complicated,” he said. As an example of the complexities, he cited the Oakland daycare center’s experience when it replaced its old carpeting. “We would never have thought to count as a public health investment removing the carpet in that daycare center, and yet it was,” he said. “Maybe we shouldn’t even try to do that level of accounting.”

Noting that much of the discussion at the workshop had focused on community-level action, Levi said that the federal government will also have a critical role to play in motivating these partnerships and making it easier to work across sectors. He was encouraged, he said, that during the confirmation hearings for the president’s nominee for Surgeon General, Senator Harkin and Senator Mikulski both wanted to know what was going to be done to make the National Prevention Council more effective. “This is the place where 20 or so federal agencies and offices come together, and they could be talking about not just removing barriers but

Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×

providing incentives for these different programs to be working together,” Levi said.

FINAL REFLECTIONS AND COMMENTS

The workshop planning committee co-chair, Terry Allan, offered his reflections on the important messages of the day. One speaker’s message was that it is essential to determine what the total health budget is and to develop a strategic plan for how to capture a percentage of those dollars to create a stable source of funding for health improvement strategies. Another message was that there is a need for some models that would help all of the disparate players in a community better coordinate their activities to reduce redundancies, particularly in terms of community health needs assessments. Allan said that the concept of creating a prevention trust fund using a small percentage of the general operating funds of hospitals, as is being done in Los Angeles, was an interesting idea for creating a sustainable funding source for population health.

Another important point, he said, was the need to think beyond the borders of the health care system and to look at community development, education, and transportation as natural partners when it comes to prevention and population health. He also cited the repeated message that collecting data to demonstrate both effectiveness and cost-effectiveness had to become a central part of every governmental public health initiative and that there needs to be an integrator or quarterback to oversee these types of initiatives and coordinate data collection. As a final comment, Allan said that public health agencies will need to step up in terms of accountability and preparedness if they want to compete with all of the other groups that will be tapping into social investing.

In his own summary remarks, workshop planning committee co-chair George Isham noted that while philanthropic and public pilot funds are crucial for testing, developing, and aligning interventions, public health agencies need a dependable long-term revenue stream to undertake the kinds of initiatives that are needed to improve population health and realize cost savings. Isham said it should be possible to change the waste reduction paradigm from one of taking resources away from the different parts of the health system to one of incentivizing progress through shared savings opportunities. He also commented that there is a real opportunity for the field to rethink the gold standard of the randomized clinical trial as the means to demonstrate effectiveness and value regarding social investments and to pursue the development of optimal cross-sectoral financial investment for policy strength benchmarks.

Isham then asked for comments from the Roundtable members and the remaining workshop attendees. Jon Ebbert of the Mayo Clinic echoed

Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×

previous concerns about how to attract investors in population health improvement, especially when the intervention is not garnering as much media attention as, for example, obesity. Both Isham and Kindig remarked that the current state of knowledge has “just scratched the surface,” and many of the discussion comments touched on the need for more robust data on performance measures specific to geographic areas and for financial calculations of needed spending as well as potential savings. On the issue of social impact investing, Pamela Russo of the Robert Wood Johnson Foundation asked what happens after the investment contract is finished. Dugger replied that with successful interventions, governments realize that they can continue the programs by seeking more economical sources of funding, such as issuing bonds at a lower interest than what is given to investment firms. Finally, Dugger acknowledged that his world of finance is unfamiliar with the world of governmental public health agencies and said that this means there is an opportunity for further discussion and intersection. With no further comments or questions, Isham adjourned the workshop.

Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×

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Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
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Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×
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Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×
Page 47
Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×
Page 48
Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×
Page 49
Suggested Citation:"6 Implications of New and Emerging Sources of Population Health Funding." Institute of Medicine. 2015. Financing Population Health Improvement: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/18835.
×
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Despite spending far more on medical care than any other nation and despite having seen a century of unparalleled improvement in population health and longevity, the United States has fallen behind many of its global counterparts and competitors in such health outcomes as overall life expectancy and rates of preventable diseases and injuries. A fundamental but often overlooked driver of the imbalance between spending and outcomes is the nation's inadequate investment in non-clinical strategies that promote health and prevent disease and injury population-wide, strategies that fall under the rubric of "population health." Given that it is unlikely that government funding for governmental public health agencies, whether at the local, state, or federal levels, will see significant and sustained increases, there is interest in finding creative sources of funding for initiatives to improve population health, both through the work of public health agencies and through the contributions of other sectors, including nonhealth entities.

Financing Population Health Improvement is the summary of a workshop convened by the Institute of Medicine Roundtable on Population Health Improvement in February 2014 to explore the range of resources that might be available to provide a secure funding stream for non-clinical actions to enhance health. Presenters and participants discussed the range of potential resources (e.g., financial, human, and community) explored topics related to financial resources. This report discusses return on investment, the value of investing in population-based interventions, and possible sources of funding to improve population health.

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