Integrating population health strategies into Medicare to enhance outcomes

By Pat Sheveland, Trish de Guzman, and Laura Duntley
Jun 5, 2023
The integration of population health strategies into Medicare has the potential to improve health outcomes, reduce healthcare costs, and enhance the overall well-being of Medicare beneficiaries. Moreover, it makes plans more competitive and appealing to this growing population.

The following compilation of insights for payers delves into the concept of population health and its implications for the Medicare program—shedding light on the emergence of nontraditional benefits that are becoming increasingly important to the aging demographic, the effects of poverty on healthcare utilization, and economic stability as a social determinant of health.

As Medicare caters to a vast and diverse population of older adults and individuals with disabilities, understanding these insights is crucial to optimize the program's effectiveness. By focusing on the health outcomes of entire populations rather than solely that of individuals, population health initiatives aim to revolutionize Medicare and cater to a wider range of beneficiaries.

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Rising health costs and increased options for baby boomers

As baby boomers age, they face more chronic health conditions, some of which are preventable and people in this age group are living longer due to advances in medicine. Osteoarthritis, diabetes, heart disease, hypertension, cancer, and obesity are health concerns that many boomers will face over the next several years. Per the American Hospital Association (AHA), by 2030, a quarter of the baby-boom generation, about 14 million, will live with diabetes, and 33% (21 million) will be obese. Approximately 50% of these boomers will suffer from arthritis, while 60% of them will seek treatment options for multiple chronic disorders.

Rising health costs for the baby-boom generation

As of 2020, over 62 million U.S. citizens (nearly 19% of the population) rely on some form of Medicare to help cover their healthcare needs. The primary rule of Medicare Parts A and B is if a treatment or service is medically necessary it is covered; however, very few alternative medicine services meet Medicare’s standards of “medically necessary."

Medicare Advantage (MA) plans are required to cover the same benefits as the traditional Medicare A and B plan but will provide additional benefits like dental, vision, hearing, or prescription drug coverage. But more plans are beginning to offer some coverage of alternative medicine services like chiropractic care, massage therapy, and acupuncture. As with traditional Medicare, these benefits are also usually limited to medically necessary situations.

Retiring baby boomers can expect costs to continue to rise, putting a strain on Medicare and Medicaid costs and creating an increased financial burden on aging boomers via out-of-pocket expenses. Per the University of Southern California (USC), “emerging seniors tend to approach health care expenses as their own personal responsibility” stating “there’s just a 50% chance that aging boomers will be able to afford their health care expenses.” Health Catalyst reports that consumer prices for inpatient health care services have increased 195% over the last 20 years and prices for outpatient services grew 200% with costs for prescription drugs, nursing homes, and adult day services doubling.

Seniors exploring non-traditional approaches to health

These dynamics are causing a new generation of Medicare-eligible recipients to look for more when it comes to health options—including alternative and complementary approaches to care. Research shows more seniors are exploring alternative therapies as a form of preventive medicine and as treatment to alleviate symptoms due to chronic pain and arthritis. In fact, according to a recent study conducted at Ohio State University, about 70% of those 50+ use alternative medicine—an increase from the 53% reported in a 2014 study.

But if a member is interested in accessing alternative medicine through MA, the specific coverage for which they are eligible depends on the plan they choose.

Complementary and alternative medicine (CAM) is increasing in popularity as a holistic approach to medical care for adults in the U.S., creating an opportunity for MA health plans to uplevel their approach in providing more non-traditional healthcare options for the newest generation of Medicare-eligible recipients. According to the National Center for Health Statistics (NCHS) Data Brief No. 325 issued in November 2018, “The use of yoga, meditation, and chiropractors in the past 12 months among U.S. adults increased…” with yoga and meditation having the largest percentage-point change. The study showed that meditation “surpassed that of seeing a chiropractor to become the second most-used approach”—part of a trend in healthcare as approaches once thought of as new age become more mainstream, like yoga and meditation as more prevalent choices for a holistic approach to health and well-being.

An alternative and complementary approach to Medicare 

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Holistic Medicine is a form of healing that considers the whole person—body, mind, spirit, and emotions—for optimal health and wellness. Complementary and Alternative Medicine (CAM) approaches to health care address the holistic model through several diverse types of modalities.

Per John Hopkins Medicine research, in the U.S., CAM is used by about 38% of adults. Some of these approaches overlap with other fields of medicine. For example, acupuncture is also used in conventional medicine along with other more mainstream accepted forms of therapy such as homeopathy and Eastern medicine which have been practiced worldwide for centuries. Use of body touch in the form of chiropractic and osteopathic medicine, massage, and body movement therapies like Tai Chi and yoga are based on the belief that illness or injury in one area of the body can affect all parts of the body. With manual manipulation, the other parts of the body can be brought back to optimal health allowing the focus on healing at the site of the injury or illness.

Dietary supplements and herbal medicine, along with the traditional approach of nutrition and diet—with a focus on the belief that food is a form of medicine—are also forms of CAM. And energy medicine is gaining popularity through electromagnetic therapy, Reiki, and Qigong.

Studies have also shown that people heal better if they have good emotional and mental health, promoting the use of meditation, biofeedback, and hypnosis as other complementary tools with traditional medicine.

Medicare Advantage plans and the new generation

The National Center for Health Statistics concluded that in 2012, 55.2 million adults had at least one expenditure for some kind of complementary health care with almost $15 billion of those dollars spent on CAM practitioners. Furthermore “Natural product supplements (excluding vitamin and mineral diet supplements) cost $12.8 billion, and $2.7 billion was paid for self-care, including expenses for books and educational materials on diet-based therapies, guided imagery, meditation, tai chi, movement therapies, biofeedback, and other treatments.” Even though the $30.2 billion is only 1.1% of the nation’s total health care bill of $2.82 trillion, it is almost a third of the out-of-pocket expenses for visits to conventional physicians.

Per Richard L. Nahin, epidemiologist with the National Institutes of Health (NIH) “Someone may use a therapy when it’s free, and then not when they have to pay for it. But when people say they’re willing to pay out of pocket for alternative treatment, they really must value and believe in it.

Older adults are searching for alternative treatments to manage not only the aches and pains that often come with age but also the chronic conditions that increase with age such as obesity, diabetes, hypertension, heart disease, and arthritis. The new generation of seniors looks beyond mainstream conventional health care treatments to alternative and complementary approaches to meet their healthcare needs.

The effects of poverty on health care utilization

Economic stability is a social determinant of health that impacts access to health care, disease risk, and quality of life. Living in poverty is correlated not only with poor nutrition, lack of stable housing, and a higher prevalence of poor health conditions, it is also correlated with a lower life expectancy. Low-income individuals face barriers to health care access and usage. Some of the programs in place to mitigate poverty-related challenges include the patient-centered medical home model (PCMH), value-based reimbursement, and telehealth options.

The need to address complexity in health care access

Since the enactment of the Affordable Care Act in 2010, the number of uninsured Americans has dropped from more than 46.5 million individuals to fewer than 27.5 million in 2021. Recent decreases in the uninsured rate can be attributed to pandemic-related policies. One policy in particular is currently still in effect. The American Rescue Plan Act increased Affordable Care Act Marketplace subsidies to offset lower rates of Employer Sponsored Insurance (ESI). While these subsidies were renewed for an additional three years in 2022 and uninsured rates have improved, the number of individuals that continue to live without health insurance poses a problem.

One factor that contributes to the uninsured rate is lack of coverage education. About 40% of high-income workers and over 66% of low-income workers don’t receive ESI. It is the responsibility of these individuals to assess and register for non-ESI health care plans. However, in 2020, 64.9% of uninsured adults had heard only a small amount or no amount of information that pertains to Marketplace coverage. Only 29.3% of uninsured adults had tried to obtain Medicaid/CHIP coverage.

A second factor that contributes to the uninsured rate is the price of insurance for those who don’t qualify for Medicaid. This includes an individual with no dependents who makes over $14,580 or a four-person household making over $30,000. According to the Census Bureau American Community survey, 64% of uninsured individuals attributed their lack of insurance to high costs. For those living just above the federal poverty line, concessions must be made with regards to health care versus basic living needs. This population is faced with the decision to limit their ability to pay for basic living costs in exchange for health care coverage or to forego health care coverage in order to cover basic living costs.

Furthermore, health care access is even difficult for those who do qualify for Medicaid. A research paper in the National Library of Medicine reviewed 34 studies, “…which demonstrated that Medicaid insurance is associated with a 1.6-fold lower likelihood in successfully scheduling a primary care appointment and a 3.3-fold lower likelihood in successfully scheduling a specialty appointment when compared with private insurance.” Medicaid patients find it more difficult to get medical appointments than privately insured individuals.

Acknowledge barriers to health care usage

In addition to difficulties with health care access, low-income workers experience difficulties with plan usage as well. Individuals below the federal poverty line have lower vehicle ownership rates and spend a higher proportion of their income on transportation. Along with transportation challenges, these individuals may need to get approval for time off and possibly obtain childcare—both of which could impede their ability to pay bills. If the location of the appointment is a great distance from the individual’s place of residence, this could add further complexity and impact their ability to get to the appointment.

After getting to the appointment, proper care may be hindered if the patient feels shamed by the care team. This could be due to stigma surrounding poverty status or due to questions about any delay in care or tardiness to the current appointment. Patients who experience this shame may not feel comfortable explaining the challenges behind their “noncompliance” which could impact their diagnosis.

With regards to treatment plan difficulties, there may be conflicts with affordability as well as prescribed rest which could impact the individual’s ability to work. When faced with the need to take preventative actions, low-income individuals may not have the time to exercise or the money to put into gym memberships/assistive equipment. They may also live in a food desert—without easy access to healthy foods. The time spent to support basic needs, and perhaps those of dependents, may leave little additional time to take preventative actions for health improvement.

Lean into Patient-Centered Programs to improve access and outcomes

Efforts to improve insurance coverage and usage include the patient-centered medical home model (PCMH) and telehealth options. The PCMH model utilizes a multidisciplinary team of professionals to increase specialty services referrals, improve management of beneficiaries with chronic conditions, and improve access to primary care. PCMHs may receive reimbursement from the Medicaid program and eligible providers may include physicians, rural health clinics, and Indian Health Service providers. Rural and Indian Health services provide care to patients in some of the most remote areas in the United States.

To provide ease of care, several Medicaid plans provide payers with a Teledoc option. Payers have 24/7 access to doctors by phone or video call. Teledoc includes access for both general medical and mental health concerns. While this option still proves difficult for those without readily available technology, it provides a solution for those without easy access to transportation.

While these programs alleviate some of the challenges low-income households face, there remains a large, underserved population. Further programs that address ease of access, affordability, and preventative care would help to further bridge the life expectancy and disease risk gap between low-income and high-income populations.

Technology trends are key to evolution of healthcare

Innovation is constant in the healthcare industry as new technology is developed to find, prevent, and cure diseases. Many technology companies focus their expertise on the development of new technology that will tackle challenges caused by COVID-19. The global pandemic has accelerated the digitization of the healthcare industry as many companies turn their attention to technology to deliver products and services. The 2022 HIMSS Future of Healthcare Report shows approximately 9 out of 10 health systems overall will position themselves to offer digital-first primary care within the next five years.

Artificial Intelligence in healthcare

The massive growth of Artificial Intelligence (AI)-driven technologies has been evident for the past couple of years and is expected to continue an uphill trajectory. To address pandemic-induced burnout and staffing shortages, AI aims to provide healthcare professionals with the tools to automate routine and monotonous tasks, allowing them to manage their time more efficiently.

AI systems are also critical for decision-making and improved efficiency, such as their use in predicting Electronic Health Record (EHR)-based clinical outcomes that simulate human behavior. For instance, a study conducted in May 2021 used AI in COVID-19 patients to identify symptoms of lung involvement. Another field of healthcare that has benefitted from AI is telehealth. An example of this is Babylon Health, which uses AI chatbots, driven by natural language processing, to collect information on patients’ symptoms and direct inquiries to the right healthcare professionals.

Healthcare’s move to the cloud

The cloud has enabled companies to create connected and integrated IT infrastructures in healthcare and there is increased acceptance among healthcare leaders of the benefits of the cloud and software as a service (SaaS). Since data protection is a critical component in healthcare and U.S. healthcare organizations must comply with HIPAA’s rigorous guidelines, additional data security protection measures must always be accounted for. With 79% of clinicals globally supporting storing patient data in the cloud to an extent, this indicates their awareness of the cloud’s transformative capabilities in relation to data security.

Technology has had a more significant impact in the healthcare industry recently, but companies have only scratched the surface of its capabilities. With 81% of healthcare providers ready to utilize automation and technology tools to improve their experience as healthcare professionals, we should expect the future of technology in healthcare to continue to improve.

Integrating population health strategies can help MA payers address the effects of poverty on healthcare utilization, embrace technological innovations, enhance health outcomes through expanded benefits, and adapt to the evolving healthcare landscape. These insights help bridge the gap in understanding of the multifaceted approaches necessary to optimize the Medicare program and improve the overall well-being of its beneficiaries.
Meet the authors
  1. Pat Sheveland, Manager, Business Consulting
  2. Trish de Guzman, Business Consultant
  3. Laura Duntley, Business Consultant