Sonic’s data-driven approach to population health management, based on helping clinicians intervene with patients to control healthcare costs, increases the lab’s revenue

Sonic Healthcare USA is using clinical laboratory test data to help its client providers improve population health. This effort also has allowed the Austin, Texas-based lab company to share in the savings one provider client received from the Medicare Shared Savings Program.

Using integrated financial and clinical analytics, Sonic is developing technologies to build clinical decision support tools for its provider and health plan clients. The providers and health plans use those tools to engage patients and help them manage their health.

“We are getting paid for contracting strategies beyond fee-for-service,” Sonic’s Chief Strategy Officer Phil Chen, MD, PhD, told the 875 attendees at the 24th Annual Executive War College (EWC) in New Orleans, one of the largest crowds in the history of the event. In his presentation, Chen outlined value-based contracting strategies that Sonic uses to share savings with its healthcare provider clients.

Identifying Low-Cost Patients Who May Become High-Cost Patients

“Follow the people, follow the money,” Chen said. During his presentation, he explained how Sonic uses lab test results and financial data to show providers how some low-cost patients over time can become high-cost patients. And how Sonic uses lab test data to help physicians identify low-cost patients who may need certain interventions before they become high-cost patients.

Providers have opportunities to intervene with patients who have renal failure, congestive heart failure, ischemic heart disease, diabetes, and other conditions, Chen said.

“Why do some people in the low-cost categories jump into the high-cost category?” he asked. Lab test data offer clues, he suggested.

In his presentation at the 24th Annual Executive War College (EWC) in New Orleans, Sonic Healthcare’s Chief Strategy Officer Phil Chen, MD, PhD (above), explained how his lab has a data-driven approach to population health management. The strategy, he says, allows clinicians to intervene as needed with patients to improve their health and to control healthcare costs. (Photo copyright: DARK Daily.)

Over several years, Sonic has worked with one client provider group to identify patients who would benefit the most from interventions to prevent their healthcare costs from rising sharply. For a health plan with 75,000 lives, Chen showed how Sonic tracked the cost of patients from one to the next. “The goal is to find out who are the patients who consume high healthcare cost, but may benefit from early intervention,” he said.

Sonic found that about two-thirds of high-cost patients were in the low-cost group just one year earlier. “We then focused on this subset trying to determine the reasons they transitioned from low to high cost,” he explained. “We found that the reason they were low cost the year before was not because they were healthy. Instead, it was because they did not engage with the healthcare system for their chronic disease management.”

Therefore, their treatment costs were low. But when they entered the healthcare system in the following year, their costs rose sharply, he said. Sonic used its iMorpheus data analytics system to show that 26.5% of the low-cost patients had diabetes, but that they had not seen their physician in the previous 12 months.

Partnering with Health Plans Increases Patients’ Visits

When Sonic explained to its health plan client that the health plan needed to contact those patients to ensure they would get the care they needed, the health plan administrator told Sonic the health plan didn’t have the resources to do the work. Instead, the health plan expected Sonic to contact the patients. The administrator told Sonic, “You need to do it because I need a healthcare partner,” Chen said.

Sonic did not have the staff to call those patients either. So, the company developed an automated interactive voice response system to call the patients. Sonic recorded the patients’ physicians and then had the system place the calls. Of the patients who received the calls, 44% responded and visited their physicians.

For a provider client, Sonic did similar work and again tracked financial results over time. After three years, the provider client, an accountable care organization (ACO) in the Medicare Shared-Savings Program, had an increase in shared savings from the federal Centers for Medicare and Medicaid Services (CMS), Chen said.

For this ACO, Sonic used its pathology and laboratory informatics system to integrate clinical and claims-based financial risk assessment data. As a result of Sonic’s work, the ACO’s payments from Medicare rose from $12.8 million one year to $26 million the next. As a result, Chen said, “We got a nice check for the work we did for this ACO.”

—Joe Burns

Related Information:

Sonic Healthcare’s iMorpheus Program Helps Clinical Laboratories Receive Financial Rewards through Medicare’s Shared Savings Program

Sonic Adds More Value to Help Physicians Treat CKD Patients

Sonic Uses Lab Data, Patient-Contact Tools, to Improve Outcomes